Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Administered by Bridging the Gap in Governance Requirements for Results Solid Waste Management Bridging the Gap in Solid Waste Management Governance Requirements for Results Purpose and audience Bridging the Gap in Solid Waste Management discusses guidance and advice that seeks to inform and comple- good practices for the governance of the solid waste ment the work of national and local authorities and management sector in a context of pressing need. practitioners. It aims to impress the need for integrated waste management The document contains numerous country and city exam- systems across all levels of government with clearly assigned ples. An attempt has been made to present a geographically institutional responsibilities, roles and functions, adequate balanced distribution of case countries across all policies and economic incentives and financing, local continents. The country examples span unitary and federal capacities for service provision, and proactive inclusion of states and exemplify differences in sector governance community, public and private stakeholders. across institutional tiers. Finally, the case studies include low-, middle- and high-income economies in order to high- The publication aims to contribute to the body of knowl- light potential solutions in contexts that differ in level of edge and experiences in organizing and managing munic- capacity, resources, services and objectives. ipal solid wastes. It provides practical information, Bridging the Gap in Solid Waste Management Governance Requirements for Results Administered by © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. 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Table of Contents Purpose and audience..................................................................................................... ii Acknowledgements.......................................................................................................... x Abbreviations.................................................................................................................. xi Executive summary.......................................................................................................... xiii 1 Introduction........................................................................................................... 1 2 Creating the right institutional structures....................................................... 7 2.1 Recognizing the need for enabling institutional framework.................................. 8 2.2 Institutional roles and functions.......................................................................... 8 2.3 Administrative tiers............................................................................................. 10 2.4 The division of roles and functions between administrative tiers......................... 12 2.5 Critical functions within each role........................................................................ 19 2.5.1 Policy maker role....................................................................................... 19 2.5.2 Planner role............................................................................................... 21 2.5.3 Regulator................................................................................................... 25 2.5.4 Service provider......................................................................................... 27 2.5.5 The financing role....................................................................................... 29 3 Policy, planning and legal frameworks............................................................ 33 3.1 Recognizing the need for change.......................................................................... 34 3.2 Waste management strategies and plans.............................................................. 34 3.2.1 Type of policy documents........................................................................... 34 3.2.2 National waste management strategies and plans....................................... 35 3.2.3 Sub-national strategies/plans..................................................................... 35 3.2.4 Scope and content of the plan.................................................................... 36 3.2.5 Guiding principles...................................................................................... 39 3.2.6 Situation analysis....................................................................................... 43 3.2.7 Definition of policy objectives.................................................................... 44 3.2.8 Options analysis and cost estimates........................................................... 45 3.2.9 How to deal with minimum required treatment and disposal capacities.... 48 3.2.10 Financing strategy................................................................................... 49 3.2.11 Paying for services and affordability........................................................ 50 3.2.12 Institutional structures and organizational models to implement the strategy.............................................................................................. 50 vi Bridging the Gap in Solid Waste Management | Governance Requirements for Results 3.2.13 Communication and public awareness...................................................... 51 3.2.14 Public consultations................................................................................. 51 3.2.15 Strategic environmental assessment........................................................ 51 3.2.16 Evaluation and review of strategies, plans and programs.......................... 52 3.3 Legal framework.................................................................................................. 52 3.3.1 What needs to be regulated...................................................................... 52 3.3.2 Types of legal acts.................................................................................... 53 3.3.3 Legislation as a process........................................................................... 57 3.4 Legal requirements and Implementation.............................................................. 59 3.4.1 Legal requirements established at national level...................................... 59 3.4.2 Legal requirements established at local level........................................... 65 3.4.3 Implementation considerations................................................................ 65 3.4.4 Enforcement............................................................................................. 68 4 Financing for sustainability and as an incentive............................................ 71 4.1 Recognizing the need for sustainable financing.................................................... 72 4.2 Policy choices concerning sector financing........................................................... 73 4.3 Defining the costs................................................................................................ 74 4.4 Willingness-to-pay............................................................................................... 76 4.5 Affordability and financial sustainability criteria................................................. 77 4.6 Financing of investments..................................................................................... 79 4.7 Operational financing and operational revenues.................................................. 85 4.7.1 Cost recovery policy................................................................................. 85 4.7.2 User charges............................................................................................ 87 4.7.3 Tariff regulation....................................................................................... 96 4.7.4 Subsidies from central transfer/general municipal revenue...................... 96 4.7.5 Extended producer responsibility financing.............................................. 97 4.7.6 Revenues from the sale of recycled materials and energy from waste....... 98 5 Organizational models......................................................................................... 101 5.1 Fit-for-purpose..................................................................................................... 102 5.2 The role, mandates and responsibilities of local authorities................................. 102 5.3 Direct provision of waste management services by local authorities.................... 105 5.4 Intermunicipal cooperation................................................................................. 106 5.4.1 Forms of intermunicipal cooperation........................................................ 106 5.4.2 Regulation of intermunicipal cooperation................................................. 107 5.4.3 Incentives for stimulating intermunicipal cooperation.............................. 108 5.4.4 Key factors having an impact on the form of intermunicipal cooperation... 109 5.4.5 Service provision options......................................................................... 112 Bridging the Gap in Solid Waste Management | Governance Requirements for Results vii 5.5 Nationally administrated waste management services......................................... 113 5.6 Private sector involvement.................................................................................. 114 5.6.1 Private sector participation...................................................................... 114 5.6.2 Potential benefits and risks of PSP........................................................... 116 5.6.3 When should PSP be considered?............................................................. 117 5.6.4 Types of PSP contracts............................................................................. 117 5.6.5 Risk allocation......................................................................................... 122 5.6.6 Contractual relationship between public and private partners.................. 124 6 Public participation and stakeholder engagement........................................ 129 6.1 The need for public participation and stakeholder support................................... 130 6.2 Public communication and engagement in waste management............................. 130 6.2.1 The importance of communication in waste management......................... 130 6.2.2 Public engagement and financial outcomes.............................................. 131 6.2.3 Local capacity for public engagement....................................................... 132 6.2.4 Waste communication plans..................................................................... 133 6.2.5 Partners in citizen engagement and communications............................... 135 6.2.6 Communications and engagement tools................................................... 139 6.2.7 Other citizen engagement mechanisms..................................................... 142 6.3 The informal sector.............................................................................................. 147 6.3.1 Benefits of the informal sector.................................................................. 147 6.3.2 Challenges............................................................................................... 145 6.3.3 Opportunities for informal sector integration.............................................. 146 6.4 Gender in waste management.............................................................................. 152 6.4.1 Gender impacts in waste management..................................................... 152 6.4.2 Actions toward gender-inclusive waste management................................ 154 7 Policy instruments................................................................................................ 159 7.1 Instruments to advance the policy agenda........................................................... 160 7.2 Landfill diversion and landfill compliance............................................................ 160 7.3 Recycling and recovery........................................................................................ 163 7.4 Extended producer responsibility........................................................................ 165 7.4.1 Public fund managed schemes for packaging waste.................................. 173 7.5 Reuse and repair.................................................................................................. 174 7.6 Waste prevention and minimisation..................................................................... 175 7.7 The circular economy as a longer-term objective.................................................. 178 7.7.1 About circular economy............................................................................ 178 7.7.2 The circular economy and waste management.......................................... 181 7.7.3 Way forward............................................................................................. 183 viii Bridging the Gap in Solid Waste Management | Governance Requirements for Results Text Boxes Box 1: South Africa – three-tiered government responsibilities for waste management 13 Box 2: Common principles in waste management........................................................ 39 Box 3: The evolution of the ‘waste hierarchy’ concept.................................................. 41 Box 4: Indicators used in municipal plans in Japan...................................................... 45 Box 5: Azerbaijan National Waste Management Strategy............................................. 47 Box 6: Selected International Conventions related to wastes....................................... 56 Box 7: Legal reforms in Morocco with regards to waste management services.............. 58 Box 8: Legal requirements typically reflected in national-level legal instruments......... 60 Box 9: Expenditure on waste management by tier of government in the Republic of Korea.................................................................................... 81 Box 10: Decision rules for balancing affordability with financial sustainability.............. 81 Box 11: World Bank support to waste management........................................................ 83 Box 12: Indonesia - Improvement of solid waste management to support regional and metropolitan cities..................................................................................... 84 Box 13: Tariff options from the perspective of municipal waste management as a public or a private good in South Africa..................................................... 87 Box 14: Belgrade waste to energy PPP project,.............................................................. 115 Box 15: Morocco Oum Azza provincial landfill................................................................ 140 Box 16: Critical contract issues..................................................................................... 124 Box 17: Lagos Waste Management Authority recycling campaign................................... 134 Box 18: Bali’s Rumah Kompos Padangtegal (RKP).......................................................... 136 Box 19: Waste Resources Action Programme in the United Kingdom.............................. 138 Box 20: MOPA in Mozambique....................................................................................... 141 Box 21: Borla taxis in Ghana.......................................................................................... 146 Box 22: SWACH an informal workers cooperative in Pune, India.................................... 148 Box 23: The evolution of Brazil’s informal sector........................................................... 150 Box 24: Women-led community recycling in Da Nang, Vietnam,..................................... 155 Box 25: Waste Banks: An accelerator for women waste entrepreneurs in Indonesia....... 156 Box 26: Slovak landfill strategy development, administrative arrangements and economic instruments................................................................................ 161 Box 27: EPR system in Chile.......................................................................................... 167 Box 28: Voluntary EPR in South Africa........................................................................... 173 Box 29: Box: EU Single-use Plastics Directive................................................................ 178 Bridging the Gap in Solid Waste Management | Governance Requirements for Results ix List of Figures Figure 1: ‘Waste Hierarchy’........................................................................................... 40 Figure 2: Relative energy intensity of virgin and recycled plastics production............... 42 Figure 3: Cost curves for landfill sites with different capacity - variation in unit costs... 49 Figure 4: Japan legal framework for waste management and the promotion of recycling 55 Figure 5: EU countries total general government expenditures on environmental protection...................................................................................................... 72 Figure 6: Media mix for City of São Paulo Clean City Campaign..................................... 140 Figure 7: Example screens in clean up app for Kaduwela Municipality.......................... 141 Figure 8: Social media post during Christmas holidays in Singapore............................. 142 Figure 9: The role of gender in waste management....................................................... 153 Figure 10: Extended Producer Responsibility as part of Circular Economy...................... 165 Figure 11: Producer Responsibility Organization interaction with other stakeholders 169 Figure 12: The circular economy – an industrial system that is restorative by design...... 179 Figure 13: Circularity strategies within the production chain, in order of priority........... 182 List of Tables Table 1: The division of roles and functions between different administrative tiers of government.............................................................................................. 14 Table 2: Key issues considered in the waste management plan................................... 37 Table 3: Typical waste management expenditures by type of activity, USD/tonne....... 75 Table 4: Capital and operating expenditures of incineration and anaerobic digestion, USD/tonne.................................................................................................... 76 Table 5: The main waste management tasks for local administrations........................ 103 Table 6: Key characteristics of service contracts, DBO contracts and DBFO contracts.. 119 Table 7: Allocation of responsibilities for various PSP options................................... 122 Table 8: Major risks and how they might be assigned................................................. 123 Table 9: Financial impact of waste management campaigns....................................... 131 Table 10: Opportunities for public engagement at multiple entity levels....................... 137 Table 11: Recycling rate by sector................................................................................ 144 Table 12: Evolution of EU recycling targets for packaging waste................................... 168 A x Conveyor belt at a recycling facility: Photo: Hroe Acknowledgements Bridging the Gap in Solid Waste Management was pre- The document was prepared by the World Bank’s Urban, pared by a core team composed of Nikola Doychinov, Peter Rural, Land and Resilience Global Practice in collabora- Faircloth, Kremena Ionkova, Lisa Yao and David Lerpiniere. tion with the Environment Global Practice. Country examples and case studies were developed by The team thanks the following individuals for their valu- Keeyoung Yoo, Andreas Elmenhorst, Thierry Michel Rene able guidance: Frank Van Woerden, Catalina Marulanda, Martin, Harsh Goyal, Ankush Sharma, Borislav Mourdzhev, John Morton and Dan Hoornweg. Mustapha Brakez, Victoria Bond, Carla Worth Del Pino, Sarah Hargreaves, Stephen Bates, Silpa Kaza, Lakshmi This publication was prepared under the guidance of Narayan, and the late Leo Larochelle. Sameh Wahba, Global Director, and Francis Ghesquiere, Practice Manager, of the Urban, Rural, Land and Resilience Funding for this publication was provided by PROBLUE, Global Practice. an umbrella multi donor trust fund, housed at the World Bank, that supports the sustainable and integrated devel- opment of marine and coastal resources in healthy oceans. Bridging the Gap in Solid Waste Management | Governance Requirements for Results xi Abbreviations AD Anaerobic Digestion MBT Mechanical-Biological Treatment BOOT Build, Own, Operate, Transfer MoE Ministry of Environment BOT Build, Operate, Transfer MSW Municipal Solid Waste CBEs Community Based Enterprises NEF National Environmental Funds CEN European Committee for Standardization (Comité NGO Non-governmental Organization Européen de Normalisation) NWMP National Waste Management Plan CII Commercial, Industrial, Institutional OECD Organisation for Economic Co-operation and CDW Construction and Demolition Waste Development DBFO Design, Build, Finance, Operate PET Polyethylene terephthalate DBO Design, Build, Operate POPs Persistent Organic Pollutants DRS Deposit Refund System PPP Public Private Partnership EBRD European Bank for Reconstruction and Development PRO Producer Responsibility Organization EC European Commission PSP Private Sector Participation EIA Environmental Impact Assessment R&D Research and Development EPR Extended Producer Responsibility RDF Refuse-Derived Fuel EU European Union RFID Radio Frequency Identification EWL European List of Waste RVM Reverse Vending Machine FIDIC International Federation of Consulting Engineers SEA Strategic Environmental Assessment GDP Gross Domestic Product SRF Solid Recovered Fuel GHG Greenhouse gases SUP Single-use plastic GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit SWM Solid Waste Management IFC International Finance Corporation VAT Value Added Tax IFIs International Financial Institutions WEEE Waste Electrical and Electronic Equipment IMA Inter-municipal Association WFD Waste Framework Directive IMF International Monetary Fund WM Waste Management ISO International Organization for Standardization WMP Waste Management Plan IWMP Integrated Waste Management Plan WtE Waste to Energy LDPE Low-density polyethilene Recycling Day in Antigua, Guatemala. Photo: Stephanie Jolluck Photography / Stockimo / Alamy Stock Photo Bridging the Gap in Solid Waste Management | Governance Requirements for Results xiii Executive summary The urgent global waste management conditions locally and globally will require significantly enhancing investment and support programs to scale up situation T waste collection, disposal and treatment capacity to both he world faces unprecedent challenges in waste cover rising waste generation and progressively narrow management. Growing populations alongside the existing service gap. Without a dramatic improve- urbanization, economic development, and associ- ment in waste collection coverage and waste recovery ated levels of consumption are accelerating waste and disposal practices, the scale of current environmental generation at a concerning pace. By 2050, waste produc- impacts will increase markedly. tion will be 73 percent higher than in 2020. This increase will be mostly driven by middle-income countries in which The ‘gap’ in solid waste management waste generation will nearly double in the next three decades, though low- and many- high income countries Against this background, widespread national ambition will contribute significantly to the growing volume. to improve waste management and transition towards more advanced circular economy models, as recorded in Only 77 percent of global solid waste is collected and national strategies and plans, is high and commendable. 33 percent of it is openly dumped. The situation in low- National governments, including in low- and middle-in- income countries is particularly alarming, where only 40 come countries, have recorded their aspirations to quickly percent of the generated waste is collected and 93 percent curb pollution, extend services to underserved areas, and is dumped or improperly managed. increase recovery and recycling. However, actual perfor- The extraordinarily large quantities of waste that either go mance and achievement of national targets and objectives unmanaged or are inadequately managed, and the increas- remain limited. ingly higher quantities of waste generated globally gives a The achievement of national targets and objectives depends serious reason for concern. Namely, global improvements on the ability of sub-national authorities to provide waste in waste management practices at their current speed management services on a reliable basis. Yet, many local will likely not be sufficient to offset the adverse impact of authorities struggle to deliver waste services to their con- poorly managed waste. In a business-as-usual-scenario, stituencies that meet national aspirations and wide ranging the gap between the waste that is currently generated environmental, financial and social objectives. and the waste that is managed properly will widen further based on the projected growth in waste generation. When a disconnection or ‘gap’ exists between aspirations of the central level waste policy and the ability to meet the There are serious repercussions of the growing waste bur- aspirations through waste management services at the local den. Poorly managed waste poses threats to both the envi- level, ambition as expressed in national strategies or inter- ronment and human health. It hinders human development national commitments remains unfulfilled. A ‘gap’ between and economic activity, serving as a barrier to national and intent and actual performance usually points to a failure in local governments’ ambitious goals for prosperity. Beyond institutional frameworks and the enabling environment. significant local impacts, inadequately managed munic- Central authorities often regard solid waste manage- ipal solid waste is a major source of marine litter and ment as a local function and beyond their mandate. Line contributes to greenhouse gases. Marine pollution and ministries often do not see it as being either their role greenhouse gas emissions from the uncontrolled burning or practical for them to provide the guidance, support and disposal of municipal waste are now increasingly seen and resources needed by local authorities to implement as major intruders on global public goods. national policy. Yet, the primary responsibility for setting Significant investment and development support will the overall institutional, policy and legislative framework be needed to simply maintain the status quo. A cumula- for the municipal waste management sector belongs with tive improvement to public health and environmental central governments. xiv Executive summary The primary responsibility for providing on-the-ground Fifth, special focus is given to stakeholders engagement, services and for ensuring the controlled management of communication with constituencies, and informal sector solid waste, on the other hand, lies with the local author- integration as components of a well-functioning waste ities. Often fiscally constrained with many competing management system. priorities beyond waste, local authorities may have lim- Finally, the paper closes with mechanisms and policies that ited ability to deliver adequate services. Their technical responsible central authorities may orchestrate in order and operational capacities may be stretched, resulting in to advance public objectives, influence the behaviour of sub-optimal arrangements for service delivery, or in poor waste producers and handlers, and make step changes in engagement with stakeholders that are crucial to imple- service level and performance at a national scale mentation of local services, including the general popu- lation and other waste generators, the private sector, and Together, these chapters aim to give practical guidance the informal sector. on waste management governance to national and local authorities as well as practitioners. The key messages of While this paper focuses on the disconnect between ambi- the paper are summarized by chapter below. tion and performance, arguably there is more than a sin- gle ‘gap’. There is the gap in waste management outcomes Creating the right institutional structures across countries of different income levels, there is a fund- ing gap for services and infrastructure, and there is a tech- An integrated waste management system relies on a net- work of formal roles and responsibilities across every nical and operational capacity gap at all government levels, tier of government. These roles must cover functions that among others. This paper argues that enabling the waste include policy-making, strategic planning, regulatory sector to perform at the desired level requires integrated enforcement, service operations, and finance. waste management systems across all levels of government with clearly assigned institutional responsibilities, roles An effective institutional structure is the foundation for and functions; adequate policies and economic incentives delivering a well-functioning waste management system. It creates an enabling framework that encourages differ- and financing; local capacities for service provision; and ent institutions to work together to deliver services and proactive inclusion of community, public and private stake- infrastructure, in line with national objectives and priori- holders. It discusses good practices for the governance of ties but reflecting local needs and constraints. the solid waste management sector in a context of press- ing need. The document is organized along seven chapters. There are two key aspects of an effective institutional struc- ture for waste management: clarity of roles and functional First, requirements for a sound institutional structure for responsibilities at different levels of government, and waste management are presented by discussing the func- clear and open collaboration, coordination and exchange tions, roles, responsibilities and inter-relationships at and amongst those institutions. between each tier of government that serve as a founda- tion for a cohesive and coordinated sector. Chapter 2 is dedicated to these structural issues, firstly, by exploring the characteristics of institutional frameworks, Second, the policy and policy actions needed to guide and secondly, by describing the responsibilities that lie at the planning process across local and central government each key tier of government. The Chapter zooms in on the authorities are outlined, along with the legal framework critical functions within each waste management role and required to enable the achievement of policy objectives sets the stage for the discussion in subsequent sections. and actions. Critical functions within each waste management role can Third, financing – the single most critical requirement for be summarized as follows: sustained operations – is discussed at length, along with The ‘policy maker’ role is responsible for defining stra- the roles and responsibilities of each tier of government tegic objectives for the sector and for establishing the in securing investment and sustained operational funds. legislative and regulatory framework for waste manage- Fourth, the paper outlines organizational models for ser- ment; defining responsibilities of institutions, waste gen- vice delivery and the need to align them with local con- erators, and owners and operators of waste management text, need and objectives. services and facilities; and ensuring coordination with Bridging the Gap in Solid Waste Management | Governance Requirements for Results xv other sectoral policies. Policy makers also define the The formulation of a strategic plan for waste management frameworks for technical and performance standards, set that conforms with government policy and legislation is a basic rules for the organization, and guide the implemen- fundamental prerequisite for a successful waste manage- tation and financing of waste management. Establishing ment system. Strategic plans set objectives and targets, effective enforcement mechanisms is another key policy are consistent with baseline conditions, reflect an analy- maker role. sis of development options and identify credible financing The ‘planner’ role includes responsibilities for developing sources. Central governments have overall responsibil- and implementing a strategic implementation plan that ity for strategic planning of waste management to meet establishes how the overarching policy objectives and tar- national policy objectives. gets will be achieved. This planning role covers multiple Developing sub-national plans is an essential function of waste management aspects, including waste prevention local authorities but is one that is often overlooked due and service delivery, future options for waste manage- to their primary focus on operations. A planning process ment, procurement procedures, and management infor- is needed to align national and sub-national strategies. mation systems. Monitoring and evaluation by planners Individual municipalities should be encouraged to fol- also enables revisions to implementation approaches. At low the national plan, especially when building new infra- the central government level, the planner role is normally structure and facilities, to ensure that the development of closely linked to the policy maker role. the sector is consistent and properly coordinated across The ‘regulator’ role is required to ensure oversight and fol- the country and makes efficient use of public resources. low-up to the activities of service providers, and to enforce Chapter 3 discusses the considerations and processes of the general implementation of legal requirements. The planning in terms of guiding principles and policy objec- regulator role deals with permitting and/or registration of tives, situation analysis, minimum required treatment waste facilities and operations, control over various waste and disposal capacities, and the scope and content of for- generators and holders, and contract administration. mal plans. Legislation that establishes the overall plan- The ‘service provider’ role involves the actual delivery, or ning framework and that creates the context within which assurance of the delivery, of waste management services plans could be implemented is also discussed. The differ- and facility operations. The ‘operator’ function can be del- ent categories of legislation as well as the legal require- egated to third parties, such as the private sector, under ments typically covered in the legislative framework are the control of contracting public authority, which acts as presented as well. the ‘client’. Alternatively, the local authority may have It should be noted that policy objectives should develop its own operational unit or establish a public company to progressively over time in step with gradual improve- provide certain services. The assignment of both the ‘cli- ments in waste management, alongside proper regula- ent’ function and the ‘operator’ function to the same pub- tion and financing. International experience confirms that lic authority, in case of direct public provision of services, transitioning the sector towards resource efficiency and requires appropriate mechanisms of accountability, inde- the concept of the circular economy are largely not market pendent controls, and recognition for good performance. driven but depend on regulation and require significant The ‘financing’ role ensures that appropriate financial financing. This aspect is often misunderstood, and there flows are in place to cover operational costs and to fund could be a desire to emulate approaches that are seen to capital investment for infrastructure development. work in well-regulated, high-income countries with the expectation that they will work equally well elsewhere. The different roles above can sit across administrative This is commonly reflected in a tendency to set objectives units and between administrative tiers. that are overly ambitious, unrealistic and unachievable. Policy, planning and legal frameworks Options analysis could be used to test to what extent local goals and ambition is practically feasible in the current Policies are needed to guide the planning process across circumstances. The analysis serves to formulate and com- local and central government authorities; a corresponding pare different technical, financial and institutional alter- legal framework is required to enable the policy objectives natives to deliver defined objectives and determine the and actions to be achieved. optimal future waste management system. It is also used xvi Executive summary to assess whether objectives are realistic and can feasi- efforts reply on municipal waste systems, public authorities bly be achieved within specific deadlines over the plan- might streamline their planning efforts to access interna- ning period. tional plastic pollution reduction finance that support both ‘downstream’ and ‘upstream’ solutions focused respectively Having clarity on the near-term and long-term national or on waste management and waste prevention. regional goals is highly relevant for local authorities and aids the process of waste management planning at the local level. National plans and strategies can serve to inform Financing for sustainability local authorities of the intended sector landscape in terms and as an incentive of infrastructure, facilities and their projected capacities, Waste management is costly, and the availability of invest- and the desired level of regionalization on service delivery. ment and operational finance is arguably the single most It should be emphasized that waste management is critical factor in determining the sustainability of munici- increasingly seen as an important sector for climate change pal waste services. Whilst revenues from recycled materi- mitigation and adaptation which makes sector policy and als and energy tariffs can provide revenues for operational planning frameworks especially relevant. Waste manage- costs, they are typically far smaller than the full costs asso- ment practices are associated with climate benefits lead- ciated with operating waste management systems. ing to both local adaptation outcomes, such as improved There is therefore a need for close interaction and collab- community health, environment and economic opportu- oration between central government authorities and local nities, and global mitigation outcomes such as reduced authorities to ensure that service objectives are realistic, greenhouse gas emissions. This means that cities could achievable, and financially viable. access climate finance to reduce emissions generated by the waste sector and to improve adaptation outcomes. Chapter 4 discusses financial aspects of municipal waste service. It covers the requirements for defining the full Indeed, the waste management sector offers sizeable costs of the services, the need to recognize the oppos- greenhouse gas emission abatement potential both ing constraints of affordability and financial viability, the directly – by reducing dumping, burning and better land- sources of finance used to fund investments in waste man- fill gas management, and indirectly through increased agement services, and the annual revenue required to source separation and recycling. Low-income countries cover the full costs of municipal waste service. often have very high greenhouse gas emissions from waste, reaching 30 percent or more of a city’s greenhouse The Chapter outlines several key policy decisions that gas inventory. This is due to higher relative proportions of must be taken at the national, regional, and municipal lev- organic waste, high quantities of dumped waste, and low els when defining and preparing the optimal waste man- energy intensity compared to middle- and high-income agement strategy and its associated financing strategy, as countries. When basic waste collection and disposal with summarized below. landfill gas management are in place and countries start First, countries should consider whether to apply the to transition upwards along the ‘waste hierarchy’ towards ‘polluter pays’ principle and to what extent it impacts greater recycling and waste prevention, the sector offers affordability, cost recovery, and the behaviour of waste larger potential for emission abatement through recycling, generators. which reduces new virgin material production and associ- ated energy consumption and emissions. Second, a key policy decision is whether to implement a traditional charging mechanism with the objective of Waste sector planning also ties directly to the global ambi- meeting cost recovery and revenue stability objectives or tion to curb plastic ocean pollution. Over 80 percent of a quantity-based charging mechanism aimed to give users ocean plastics come from unmanaged or poorly managed incentives to minimize waste generation and separate municipal solid waste. Given that plastics production and their waste for recycling. use is projected to increase significantly in coming decades, some proportion of this material will inevitably make its Another key policy decision is whether the services will way into the environment unless waste management sys- be provided directly by the local authority or delegated to tems improve. To that end, international organizations and private sector operators, and how the related service costs other financiers have mobilized resources to assist coun- will be financed and charged to households and legal enti- tries in their efforts to curb marine plastic litter. As these ties. Tariff structures and charging models related to this Bridging the Gap in Solid Waste Management | Governance Requirements for Results xvii decision can have a bearing on performance and fee col- for intermunicipal cooperation and private sector involve- lection efficiency. ment, specific guidance, or incentive structures. Policy may also be needed to formalize the support given Chapter 5 considers three main models for municipal to low-income or vulnerable households, to apply a val- waste management service provision: models for service ue-added tax on waste services, and to organize the provi- delivery by local authorities (directly or through munic- sion of waste services to legal entities. ipally owned companies), intermunicipal cooperation between local authorities, and private sector involvement. Finally, it may be necessary to consider policy regarding the revenue consequences of primary waste collection that Intermunicipal cooperation is often considered by local occurs outside the domain of the formal local authority authorities because most waste treatment and disposal service, such as through community-based enterprises. A installations demonstrate significant economies of scale key policy decision municipalities face is whether to intro- with rising plant capacity. The Chapter discusses the main duce a separate user fee to cover the costs that it incurs for models of intermunicipal cooperation as well as factors subsequent transportation, treatment and disposal. that have an impact on the form of cooperation. As international experiences indicate, costs are a fre- The Chapter further presents models for private sec- quent barrier to the realization of national waste manage- tor involvement. A prerequisite for involving the private ment ambitions. In particular, while local governments sector is a guarantee to private companies that they can are tasked with the implementation of waste management recover all legitimate costs incurred in financing, con- plans, they are often resource-strapped and ill-suited to structing, and operating waste services. This assurance fund the necessary capital and operations required. It requires a recovery of the full costs of service provision, is critical for both central and local governments to par- such as by setting tariffs on a full cost recovery basis and ticipate in an integrated planning process that identifies ensuring that the resulting charges are affordable to users. financing sources to meet policy objectives. Potential benefits and considerations for public-private risk allocation are also discussed as well as the contrac- Organizational models tual relationships between public and private partners. Effective organizational models – the structures that underlie waste management service delivery – should Public participation and stakeholder respond to the administrative needs of the desired waste engagement management system, and not the other way around. Waste The success of waste management depends on the partic- management service delivery models should be based on ipation of stakeholders and the presence of a ‘social con- local financial, operational, and administrative require- tract’ with citizens and the population-at-large. Waste ments and policy objectives. The alternative, fitting waste management systems are much more successful in con- management actions to an existing organizational model, texts in which core stakeholders engage in and support leads to capacities and coordination structures that may waste policies and services. Where the public accepts and not be suited to policy objectives. participates in waste management by abiding to guide- Good organizational models reduce financial limitations, lines in handling waste and by paying for services, waste sustain investments in waste management facilities, and management operations can excel. In contrast, when users may capture opportunities for cooperation and economies or operators are disengaged or even opposed to the waste of scale between local authorities. The organization of ser- management system, performance suffers. vices may also make waste management operations attrac- Waste management involves a diverse range of stakehold- tive to the private sector in order to harness its potential ers and local authorities must take them into account in for investment, new technologies, and technical know- designing an effective waste management system. Their how in service delivery. perspectives can not only help foster positive behaviours Although waste services are mainly implemented by local that allow the system to function smoothly, but also help authorities, organizational success can be aided signifi- local authorities build a more equitable and just public ser- cantly by supportive arrangements from the central gov- vice that is sustainable in the long-term. By ensuring that ernment, namely in the form of enabling legal frameworks the waste management system serves all stakeholders, xviii Executive summary local authorities may nurture a widespread sense of ‘own- learning through consultations, providing fair employment ership’ of the waste management system that leads to pos- structures, and equalizing access to capital and economic itive social, environmental, and economic outcomes. resources. Options and examples of successful practices are discussed in the final section of Chapter 6. Chapter 6 builds on the basic principles and approaches of citizen engagement and focuses on three aspects of par- ticular importance for the waste sector: effective public Policy instruments outreach and communications, integration of the informal A careful mix of policy measures and an enabling legisla- sector with the rest of the sector chain, and gender-inclu- tive environment are required to ensure effective action at sivity in waste management practices. all levels of government to move waste management prac- Waste management requires public participation when it tices towards national objectives in a cohesive and coor- comes to proper waste placement, source separation, waste dinated way. To be effective, policy instruments should minimization, and siting of infrastructure. Gaining public preferably be applied by the central government and cover buy-in requires on-going and financially-backed communi- the entire territory of the country. cations and awareness-raising activities that are sometimes Policy instruments must be appropriate to the context. overlooked but essential to successful waste management Experience illustrates that only once the basic foundations systems. Public communication programs in waste manage- of a waste management system are in place it is feasible to ment are most effective when they focus not only on inform- fully implement progressive policies to move up the ‘waste ing users of basic rules and processes, but also on citizen hierarchy’ that advances from traditional disposal to reuse empowerment, feedback generation, and collective owner- and prevention, and towards sustainable resource man- ship. This Chapter describes key considerations for national agement. To make this possible, it is important that the and local waste administrators in planning and executing market failures associated with poor waste management public communications. These considerations include audi- (especially waste dumping) are corrected first. ence identification, messaging, partnerships, inbound com- munication, and outreach channels. Chapter 7 provides international examples of policy instru- ments for sustainable resource management. The exam- A particularly important stakeholder group that must be ples presented should be considered potential tools and engaged in waste management is the informal sector. The be evaluated within each country-specific waste manage- informal sector consists of workers that are not formally ment context. A different mix of policy instruments will be charged with waste management activities. Yet, the infor- required in different contexts and at the different stages of mal sector often plays a key role in delivering basic waste development if the waste management system. collection services and achieving resource sustainability in The key policy mechanisms available for supporting the low- and medium-income countries, often at low direct cost, transition to sustainable resource management should be while generating local employment. However, despite the pursued in line with the ‘waste hierarchy’. First, policy benefits of the informal sector, informal waste workers gen- instruments related to waste collection and controlled dis- erate challenges and points of tension for local governments, posal should be secured, followed by measures to support especially as waste systems formalize in rapidly urbanizing the transition to sustainable resource management, and contexts. Several solutions for efficiently integrating the finally tools to move towards a circular economy. informal sector into a modernizing waste sector are pre- sented in this Chapter, including through policies, organiza- For example, policy instruments for landfill diversion tion and cooperation, and occupational recognition. include landfill taxes, landfill bans, disposal sites invento- ries, and limits on landfill financing. Measures to establish Another important consideration is the distinction between effective landfill management are essential for moving up how people of different genders experience the waste man- the ‘hierarchy’ and could be considered when dumping is agement sector. While waste management is a universal not practiced and alternatives to landfilling could be con- service that effects all citizens, social structures, traditional sidered. Collectively, these instruments create conditions household roles, and gendered disparities in employment for reducing dependence on landfilling and transitioning opportunities in both formal and informal capacities can along the ‘hierarchy’. strongly influence social and economic outcomes for a large population. There are several actions that can be taken Instruments towards increased recycling and recov- toward gender-inclusive waste management that include ery, including recycling and recovery targets, standards Organic waste at a compost plant. Photo: AnSyvanych xix for recycled materials, design for recycling, and taxes and providing for the safe disposal of wastes must be related to recycling content are also discussed in Chapter the immediate priority for countries that contribute to 7. Extended producer responsibility for packaging waste local and global pollution, along with concerted efforts to is presented at some length. Reuse and repair as well enhance the environmental awareness of constituencies as waste prevention and minimization are also explored and inspire behaviour change. briefly with various examples of policy instruments. These ‘downstream’ solutions (postconsumer, such as The Chapter concludes with a short description of the cir- recycling and disposal), though regarded as transitional, cular economy. The transition to the circular economy is are a foundational prerequisite for a transition upwards on likely to advance at different speeds in high-, medium- the ‘hierarchy’ and towards a circular economy. Expanding and low-income countries and will depend on their base- waste collection services in low- and middle-income coun- line conditions, economic development, national income tries, providing support to the informal sector, and build- and financial capacities. There is a concern that the waste ing facilities as an intermediate solution to dispose of management ‘gap’ between countries, including in waste waste materials that cannot be recycled economically, prevention and waste material re-utilization, will widen must be applied together with circular strategies focused further before it begins to converge. This is due largely on waste prevention and reduction. to dramatically different conditions across countries with different income levels, with most high-income countries Concerted effort will be required. Active collaboration implementing advanced waste management technologies between governments, businesses, the manufacturing and some circular economy policies whilst low- and many industry, entrepreneurs, the research and development middle-income countries continue to struggle with imple- community, and philanthropic and citizens’ organizations menting and sustaining the most basic of waste manage- will be needed. Above all, an environmentally aware and ment services. inspired world population must drive the change towards sustained environmental practices – demanding action In a business-as-usual scenario, and given projected from administrations and individually practicing sus- waste generation growth forecasts and the ways in which tained consumption and utilization behaviour. municipal waste management services are currently orga- nized and financed, a progressive worsening of the imbal- This executive summary captures concepts from the full ances between higher and lower income countries seems Bridging the Gap publication but is not a complete portrayal almost inevitable. In the meantime, pollution of the air, of the requirements of effective waste management gover- soil and oceans is becoming a major environmental emer- nance. For details, case studies, and sources, please refer to gency that demands immediate attention. the main text. A business-as-usual scenario is not sustainable and must ‘Solid waste management’ and ‘waste management’ are change. Extending municipal waste collection services used interchangeably in this document. About 1,500 people from various communities participated in Indonesia’s National Waste Awareness Day. Photo: © Gholib Marsudi Draemstime.com. 1 1 Introduction 2 1 Introduction The quantities1 of municipal solid waste Wide-spread poor waste management practices have large are increasing environmental impacts and pose direct risks for human B health. Waste burning is a significant source of air pollu- y 2050, in a business-as usual scenario, the world tion when it occurs in open dumps or in facilities that emit is projected to generate 73 percent more municipal pollutants and fine particles that are particularly danger- solid waste than in 2020. The increase in waste ous to human health. generation is driven by economic development, urbanization and population growth. Littering and disposal of waste through open dumping leads to soil contamination and pollution of rivers, lakes High-income countries produce the most waste per capita, and underground water, and of human living environ- where rising incomes and consumption have gone hand- ments. Waste discarded into drainage systems leads to in-hand with higher waste generation. Going forward, blockages, creating risks of flooding and breeding grounds waste generation rates in most high-income countries are for disease. Significant risk is associated with landslides expected either to remain stable or to slightly increase. and fires at landfills and larger dump sites. For countries with the highest per capita GDP, a slight neg- ative correlation between per capita income and waste Dump sites and landfills occupy valuable agricultural land generation is expected, with waste production beginning and locating new sites for treatment and disposal facili- to curve down recently. ties becomes increasingly difficult with growing levels of urbanization. Scattered dumping also drives market and Middle income countries, on the other hand, are pro- real estate values downward and negatively impacts tour- jected to see the largest increase in both per capita waste ism and local economic development. generation and total waste generation over the next 30 years. This waste generation will be driven by high lev- Globally, the state of the sector is els of growth in both economic activity and population. a matter of concern Urbanization will additionally contribute to this process as higher urban consumption patterns replace rural ones. The environmental impact of inadequate waste manage- Waste volumes are projected to grow by more than 2.5 ment practices and the growing quantities of globally gen- times for low-income countries and nearly double for mid- erated waste gives serious reasons for concern. dle-income countries The extraordinarily large quantities of waste that either Waste collection rates vary widely with national income go unmanaged or are inadequately managed are unac- levels. In high-income countries, collection rates are close ceptable. At the same time, quantities are only increas- to 100 percent. However, in lower-middle-income coun- ing. Global improvements in waste management practices tries, collection rates are 51 percent, and in low-income at their current speed will likely not be sufficient to off- countries, only 39 percent. Uncollected waste in low-in- set the adverse impact of poorly managed waste given the come countries is typically managed independently by rapid increase in quantity. This rapid increase in quanti- households and is openly dumped, burned, or less com- ties alone will require significant effort just to maintain monly, composted. Collection rates are substantially the status quo. higher in urban areas than in rural areas as waste man- Waste management practices in lower-middle and low-in- agement tends to be an urban service. In lower-middle-in- come countries is of particular concern. There has been a come countries, waste collection rates in cities are more notable increase in the quantity of municipal waste gener- than double those in rural areas. ated annually in these countries while future growth is pro- Globally, 33 percent of waste is openly dumped, 37 per- jected to result in an additional 550 million tonnes in 2040 cent is disposed of in various types of landfills, 19 percent over 2020 levels, an average annual increase of 27.5 million is recovered via recycling and composting, and 11 percent tonnes per year.2 Given the gap between the waste currently is treated in incinerators. Open dumping is prevalent in generated and the small share of that which is managed low-income countries, where 93 percent of the waste is properly, the projected increase in waste generation will burnt or dumped. only widen this gap further in a business-as-usual-scenario. 1 Section is based on Kaza, S., Shrikanth S. and Chaudhary, S., More Growth Less Garbage, World Bank, 2021 and What a Waste 2.0, World Bank, 2018 (Note that as of July 15, 2021, the waste generation estimates have been updated with the final publication on More Growth, Less Garbage). 2 Ibid Bridging the Gap in Solid Waste Management | Governance Requirements for Results 3 Beyond significant local impacts, municipal solid waste is The calls for action and emerging global partnerships are a a major source of marine litter and contributes to green- promising start. Internationally, several important initia- house gases. Marine pollution and greenhouse gas emis- tives have been launched with aims of reducing pollution sions from the uncontrolled burning and disposal of and the loss of resources. The G20 Action Plan on Marine municipal waste are now seen increasingly as a major Litter6 is an example. Several individual or group of gov- intruder on global public goods. ernments have adopted regional plans. International and philanthropic organizations, notably the Ellen McArthur Studies suggest that millions of tonnes of plastic leak into Foundation, are spearheading policy dialogue and inno- the ocean every year. It is estimated that over 80 percent vation in this important area whilst others are supporting of ocean plastics comes from unmanaged or poorly man- grassroot initiatives and social action. aged municipal solid waste on land.3 Three-quarters of that quantity is found to come from uncollected waste with A call for a global UN Treaty on Plastic Pollution was the remaining quarter leaking from within the waste man- recently made by the Ellen McArthur Foundation, World agement system due to poor controls and secondary pol- Wildlife Fund (WWF) and Boston Consulting Group, draw- lution, such as unauthorized dumping of collected waste.4 ing parallels with the experience gained from the Montreal Given that a third of the municipal waste generated glob- Protocol7,8,9. The proposal calls for global goals and bind- ally is currently dumped and that waste generation rates ing targets in order to ‘harmonise policy efforts, enhance continue to increase, a business-as-usual scenario would investment planning, stimulate innovation and coordinate result in a global emergency. infrastructure development’. It recognizes that ‘while vol- untary initiatives can deliver change among market lead- Beyond pollution, solid waste contributes to greenhouse ers, an international binding approach is needed to deliver gases (GHG) emissions. An estimated 1.6 billion tonnes the necessary industry scale change.’ of CO2-equivalent of GHG emissions were generated from solid waste in 2016, some 5 percent of global emissions, Major businesses also issued a call for a UN treaty on plas- primarily due to open dumping and unmanaged land- tic pollution to address the fragmented landscape of regu- fill gas. Without improvements in the sector, solid waste lation and to complement existing voluntary measures. A related emissions are anticipated to increase to 2.6 billion manifesto10 urges governments to negotiate and agree on tonnes of CO2- equivalent by 2050.5 a new global agreement on plastic pollution, highlighting that ‘there is no time to waste’. This is the first collective The global impact of proliferating waste on the public corporate action calling on governments to adopt a treaty good has made it increasingly apparent that a business- on plastic pollution. as-usual scenario is neither sustainable nor desirable and the current trajectory must change. The ‘gap’ in solid waste management Making a cumulative improvement to public health and Against this background, widespread national ambition to environmental conditions locally and globally will mean improve waste management and transition towards more significantly enhancing investment and support pro- advanced circular economy models, as recorded in national grams to scale up waste collection, disposal and treat- strategies and plans of governments in countries around ment capacity, systems and capacities to cover both the world, is high and commendable. National govern- the rising waste generation and progressively narrow ments, including in low- and middle-income countries, have the current service gap. Without drastic improvement recorded their aspirations to quickly curb pollution, extend in waste collection coverage and waste recovery and services to underserved areas, and increase recovery and disposal practices, the scale of current environmental recycling. However, actual performance and achievement of impacts will increase markedly. national targets and objectives remain limited. 3 Stemming the Tide: land-based strategies for a plastic free ocean, Ocean Conservancy and McKinsey Center for Business and Environment 4 Ibid 5 What a Waste 2.0, World Bank, 2018 6 Available at https://g20mpl.org/wp-content/uploads/2020/11/G20mpl_20201214_IGES_second-edition.pdf 7 The Montreal Protocol on Substances that Deplete the Ozone Layer 8 See https://www.ellenmacarthurfoundation.org/news/ngos-and-businesses-call-for-un-treaty-on-plastic-pollution 9 See https://www.worldwildlife.org/press-releases/ngos-and-businesses-call-for-un-treaty-on-plastic-pollution 10 Available at https://www.plasticpollutiontreaty.org/ 4 1 Introduction The achievement of national targets and objectives depends may result from a failure to effectively assign roles and on the ability of sub-national authorities to provide waste responsibilities within the institutional framework, such management services on a reliable basis. Yet, many local as through a mismatch between the high level of ambition authorities struggle to deliver waste services to their con- within policy and legislative frameworks and regulations stituencies that meet national aspirations and wide ranging and the availability of investment and operational financ- environmental, financial and social objectives. ing. It may also be the case that the central authorities or line ministries do not see it as being either their role or Although municipal solid waste management is a critical — practical for them to provide the support and resources yet often overlooked — activity in the process of planning needed by local authorities to implement national policy. sustainable and healthy cities and communities, it has typi- This typically points to a significant failure in the enabling cally and historically been regarded simply as a local issue. environment for the sector. Previously, concern over the cross-border impacts of waste focused mainly on trans-frontier shipments. These percep- Similarly, local authorities, which are often fiscally con- tions are now rapidly changing with growing concern over strained with many competing priorities beyond waste, the contributions made by municipal solid waste to marine may in practice have limited ability to deliver adequate litter and climate change. These matters of global interest services – particularly in low- and middle-income level now create opportunities for renewed partnerships and col- countries. Their technical and operational capacities may laboration at the national and local levels. be stretched, resulting in sub-optimal arrangements for service delivery or in poor engagement with the sector The primary responsibility for setting the overall institu- stakeholders crucial to successful definition and imple- tional, policy and legislative framework for the municipal mentation of local services, such as the general popula- waste management sector belongs with central govern- tion and other waste generators, private business, and the ments. The primary responsibility for providing services informal sectors. and for ensuring the controlled management of solid waste lies with local authorities. This document argues that addressing the ‘gap’ and enabling the waste sector to perform at the desired level, The enabling environment provided by the central govern- requires integrated waste management systems across all ment should empower, motivate, guide and provide local levels of government with clearly assigned institutional authorities with the resources that they need to perform responsibilities, roles and functions; adequate policies their institutional waste mandate effectively. It should and economic incentives and financing; regulation, mon- support the achievement of national objectives whilst rec- itoring and enforcement; local capacities for service pro- ognising local needs and constraints. vision; and proactive inclusion of community, public and When a disconnection or ‘gap’ exists between the aspira- private stakeholders. tions of the central level waste policy and the ability to meet them through waste management services at the Purpose and audience local level, ambition as expressed in national strategies or Bridging the Gap in Solid Waste Management discusses international commitments remains unfulfilled. This wid- good practices for the governance of the solid waste man- ens disparities between the capacities of low, middle and agement sector in a context of pressing need. high-income countries to achieve their aspirations and their readiness to progress towards more advanced forms It aims to impress the need for integrated waste manage- of waste management, material handling, waste preven- ment systems across all levels of government with clearly tion and circularity. assigned institutional responsibilities, roles, functions and tasks, adequate policies, economic incentives and financ- While this document focuses on the disconnect between ing, local capacities for service provision, and proactive ambition and performance, arguably there is more than inclusion of community, public and private stakeholders. a single ‘gap’: there is a gap in waste management per- formance between countries of different income levels, The document aims to contribute to the body of knowledge there is a funding gap for services and infrastructure, and and experiences in organizing and managing municipal there is a technical and operational capacity gap, among solid wastes. It provides practical information, guidance others. This paper argues that a ‘gap’ between intent and and advice that seeks to inform and complement the work actual performance usually points to a failure in institu- of national and local authorities and practitioners. The tional frameworks and the enabling environment. This document has been designed to be read in full so that the Bridging the Gap in Solid Waste Management | Governance Requirements for Results 5 insights from each section can be interpreted in complete CHAPTER 6 is about stakeholder engagement with context, though it can also serve as a reference document particular focus on public outreach and communications, with topics separated by chapter. the informal sector and gender in waste management. Bridging the Gap in Solid Waste Management was prepared CHAPTER 7 provides a list of targeted policy instruments at an opportune time. The Covid-19 pandemic unlike to advance policy objectives, influence behaviour. any other crisis put the world on pause, not only result- ing in a significant global loss to GDP but also highlight- The paper contains numerous country examples. An ing the importance of proper sanitation systems, essential attempt has been made to present a geographically bal- workers, and government preparation in the event of an anced distribution of case countries across all continents. emergency. The pandemic also provided an opportu- The country examples span unitary and federal states and nity. There has been an unparalleled call for action and exemplify differences in sector governance across insti- resource mobilization for recovery. Many see an opportu- tutional tiers. The case studies also include low-, mid- nity, unrivalled in scale, to rebuild in greener and better dle- and high-income economies in order to highlight ways. Ensuring that the solid waste management sector potential solutions in contexts that differ in level of capac- is incorporated in the growing call to promote more sus- ity, resources, services and objectives. While the case tainable, low carbon urban growth is critical to changing studies cover a variety of approaches and results achieved the current urbanization trajectory. An energized, well-or- worldwide, they are not meant to be directly emulated as ganized and adequately resourced municipal waste sec- best practices but rather to provide illustrative examples tor is also an opportunity for improving the livelihoods of that can inform locally driven design. marginalized community members and for bringing better While critical to the evolution of the waste management economic prospects for communities, businesses and the sector, the role of technology is deemphasized in this pub- public sector. lication in order to provide a dedicated focus on gover- This publication is organized as follows: nance. The reader may explore considerations around technology, infrastructure and innovation in solid waste CHAPTER 2 presents the requirements for a sound insti- management through several companion publications tutional structure for waste management. It addresses from the World Bank, which include: functions, roles, responsibilities and inter-relationships at and between each tier of government as a foundation for a ❚ What a Waste 2.0: A Global Snapshot of Solid Waste cohesive and coordinated sector. Management to 2050, (2018) CHAPTER 3 outlines the policy and policy actions needed ❚ Decision Maker’s Guides for Solid Waste Management to guide the planning process across local and central Technologies, (2018) government authorities and the legal framework needed ❚ Municipal Solid Waste Management: A Roadmap for to enable the policy objectives and actions to be achieved. Reform for Policy Makers, (2018) CHAPTER 4 discusses financing and the need to recognize ❚ Financing Landfill Gas Projects in Developing Countries, it as the single most critical requirement for sustained (2016) operations. Particular attention is given to underlying conditions and practices to secure operational financing. ❚ Sustainable Financing and Policy Models for Municipal Composting, (2016) CHAPTER 5 outlines organizational models for service delivery and the need to align them with local context, ‘Solid waste management’ and ‘waste management’ are need and objectives. used interchangeably in this document. “Keep Ghana Clean” sign on trash removal tricycles in Accra, Ghana. Photo: © bdodane / Alamy Stock Photo 7 2 Creating the right institutional structures 8 2 Creating the right institutional structures 2.1 Recognizing the need for enabling held by each institution need to be matched by financial and technical capacity. When the capacity does not match institutional framework A the role, national ambitions for waste management are n effective institutional structure is the essential unfulfilled at the local level. foundation for delivering a well-functioning and It is important to recognise that there is no ‘one size fits integrated waste management system across all all’ way to structure institutions for waste management, in levels of government. Waste management ser- the same way that there are numerous ways to plan, oper- vice delivery is typically a local authority responsibility ate and finance waste management systems. The structure with central government setting policy and the overarch- used needs to fit the context and constraints. A range of ing legislative framework. However, this simple descrip- factors will determine the appropriate institutional frame- tion obscures the much more complex division of roles work, such as size of territory and population, geographic and responsibilities that sit across different tiers of gov- characteristics, predefined administrative and politi- ernment, functions that include policy and strategic plan- cal division, the level of development of the waste man- ning, regulatory enforcement activities, monitoring and agement system, technical and financial capacities and data reporting, financing and communications. demands, and existing institutional structures. There are The institutional structure that is applied to deliver these also interactions with other stakeholders that are import- different functions needs to recognise this complexity and ant, particularly the private and informal sectors who play be organized in such a way as to guide, empower, influ- a key role in service delivery. ence, incentivize, and resource subnational authorities. The institutional structure will need to evolve as the The structure needs to create an enabling framework waste management system itself develops. As consumer that encourages different institutions to work together to behaviour alters, affordability improves, technologies deliver effective waste management services and infra- develop and wider issues affect waste management sys- structure, in line with national objectives and priorities tems, the institutions and the roles that they fulfil need to but reflecting local needs and constraints. adapt. As the concept of the circular economy gains prev- There are two key aspects of an effective institutional alence, the links between waste management and other structure for waste management: clarity of roles and func- aspects of government, such as industrial strategy and tional responsibilities at different levels of government; commerce, become increasingly important. and ensuring clear and open collaboration, coordination The roles and responsibilities of different institutions in and exchange amongst those institutions and between dif- the context of waste management can be defined as11: ferent tiers of government. This chapter discusses these issues further, firstly explor- ❚ Policy maker – responsible for setting the overall stra- ing the characteristics of institutional frameworks that tegic direction for the sector, defining targets and support collaborative and effective waste management, objectives, and establishing the necessary legislative and secondly describing the responsibilities that are framework encountered at each key tier of government. It zooms in ❚ Planner – the body (or bodies) that are responsible for on the critical functions within each waste management making and implementing a long-term strategic imple- role and sets the stage for the discussion in subsequent chapters. mentation plan that will meet the defined policies for waste management, and for monitoring progress against that plan. This role will also often have data manage- 2.2 Institutional roles and functions ment function, establishing the framework for monitor- Achieving coordinated and effective waste management ing performance and collecting data requires that the roles and tasks of different institutions are clearly defined and integrate well with each other, both ❚ Regulator – responsible for ensuring that environmen- between institutions and between different tiers of gov- tal, technical and financial standards are enforced, and ernment. Where there is ambiguity or overlap, there are for administering contract requirements to ensure that often problems associated with duplication of effort, gaps waste management services and infrastructure commis- in responsibilities and confusion. The responsibilities sioned from third parties meets defined standards Based on Wilson, D., Whiteman A., Tormin, A., World Bank: Strategic Planning Guide for Municipal Solid Waste Management, World Bank, 2001 11 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 9 ❚ Service provider – responsible for delivering waste monitoring, evaluation and planning revision. management services and ensuring the controlled man- Improvement of the planning process for waste collection agement of wastes services and waste disposal systems should be undertaken ❚ Financier – the institutions that are responsible for concurrently with improvements to the overall organisa- collecting and distributing the financial flows for sup- tional structure for waste management at the different porting waste management services, both in terms of planning levels. At the central government level, the plan- ner role is normally closely linked to the policy maker role. operational finance and capital finance Often many of the planner and policy functions are fulfilled In addition, stakeholder engagement and communication by the same unit in the central government. are considered cross-cutting issues that require involve- Key functions of the planner are: ment from all roles. Each key role is described in further detail below. ❚ Develop the long-term strategy/plan for the sector Setting the policy for waste management ❚ Planning of waste infrastructure (the ‘policy maker’ role) ❚ Identifying site locations for waste management The policy maker is responsible for defining strategic infrastructure objectives for the sector (the overarching aims and tar- ❚ Assessment of development of specific waste gets) and for establishing the necessary legislative and infrastructure regulatory framework for waste management, defining responsibilities of institutions, waste generators and ❚ Coordination with other authorities, administrative holders and operators of waste management services and units and sectors facilities, and also ensuring coordination with other sec- toral policies. It also defines the framework for technical ❚ Data management and performance standards and basic rules for the orga- ❚ Capacity building nization, implementation and financing of waste manage- ment. Establishing effective enforcement mechanisms is Permitting, inspection and enforcement (‘regulator’ role) also a key part of the policy maker role. The waste management regulator role is required at differ- Key functions of the policy maker are: ent levels to assure appropriate oversight and follow-up to the activities of service providers, and to enforce the ❚ Policy development general implementation of legal requirements as per the ❚ Establishing the legislative framework for waste strategy/plan. The regulator role deals with permitting management and/or registration of waste facilities and operations, con- trol over various waste generators and holders, and con- ❚ Defining specific regulations for waste management tract administration. Developing and implementing the strategic implementa- The contracts administration function normally addresses tion plan (‘planner’ role) waste management project development and tendering, contacts management, and contractor payment and pen- The planner is responsible for developing and implement- alty control. The associated technical inspection function ing a strategic implementation plan that sets out how the normally has the responsibility for monitoring compliance overarching policy objectives and targets will be achieved. with facility construction works and operational require- This planning has to cover different waste management ments in contractual and associated local regulatory aspects, including waste prevention and considering all documents. aspects of service delivery, including the collection of waste and its final treatment, recovery and disposal. Key functions of the regulator are: Planning also needs to address appropriate waste man- ❚ Permitting of waste facilities agement data collection techniques, analysis of waste composition, waste generation projection and assessing ❚ Environmental monitoring of waste management future options for waste management, procurement proce- operations dures and management information systems for effective 10 2 Creating the right institutional structures ❚ Setting environmental, social and technical standards from one or more sources: direct user fees, local taxation, for waste management activities transfers from central government, revenue from sales of electricity and heat, and fees from Extended Producer ❚ Contract management and performance supervision Responsibility (EPR) schemes. Revenues from the sale of Waste management service delivery (‘service provider’) recyclable materials can also provide a revenue stream but are very unlikely to cover the overall costs of provid- The ‘service provider role’ involves the actual delivery, or ing waste management services. Capital funding can also assurance of the delivery, of waste management services come from various sources including central governments, and facility operations. The fact that the local authority commercial bank finance, donors and the private sector. usually holds the overall and ultimate responsibility for waste management system implementation within its Key functions of the financing role are: boundaries does not mean that it has to carry out the oper- ❚ Operational financing of waste management services, ation of the system itself. In many cases, it engages the user fees, taxation, other revenue from sales of waste private sector to do this or establishes a public company derived products, transfers and/or EPR fees for the provision of certain services. The ‘operator’ function can be handed over to third parties ❚ Setting fees and tariffs under the control of contracting public authority which ❚ Capital finance for development of waste infrastructure then acts as the ‘client’. Alternatively, the local author- and purchase of equipment and vehicles ity may have its own operational unit which acts at the waste management operator. The assignment of both ‘cli- The different roles can sit across administrative units ent’ function and ‘operator’ functions to the same public and between administrative tiers. For example, the ‘reg- authority, in case of direct provision of services, requires ulator’ role is often split between central government (for development of appropriate mechanisms of accountabil- the control of waste management installations) and local ity and independent controls and recognition for good authority (for the control of collection services). Similarly, performance. ‘financing’ can be split across central government (for the provision of capital finance) and local authority (for the Key functions of the service provider are: collection of user fees to provide revenues for the oper- ❚ Operational planning of waste management services ational costs of service provision). Other roles are often (e.g. determining the details of waste management more discrete in terms of where they sit in terms of admin- operations such as vehicles routes, collection loca- istrative tiers (for example, the ‘service provider’ role almost always sits at local authority level). tions, etc) Different institutions or administrative departments at the ❚ Setting and monitoring service standards (often same administrative tier can have different roles, keep- referred to as the ‘client’ function) ing their separate functions and not allocating them to ❚ Procurement of waste management infrastructure, the same administrative unit. For example, different units service contracts or related equipment within a local authority are often responsible for develop- ing the long-term strategic implementation plan for waste ❚ Operation and maintenance of waste management management (‘planner’ role) and the provision of day-to- facilities day waste management services (‘service delivery’ role). ❚ Communications and awareness-raising Different administrative levels and their interaction with roles in terms of waste management are discussed in the ❚ Engaging with the informal sector and protecting sections below. welfare and livelihoods Ensuring the sustainable financing of waste management 2.3 Administrative tiers (the ‘financing’ role) The roles and functions described above are normally The financing role is essential to ensure that appropriate spread across different administrative tiers. The number financial flows are in place to cover operational costs and of tiers and the way in which responsibilities are split also to fund capital investment for infrastructure devel- between different tiers of government, varies substan- opment. Operational financial flows can be generated tially between countries. The set-up is dependent upon a Bridging the Gap in Solid Waste Management | Governance Requirements for Results 11 range of factors including wider (non-waste management villages with a few hundred residents to mega cit- specific) governance frameworks, historical and political ies. These characteristics require different institu- factors, and geographical characteristics. tional structures and divisions of roles and functions. The territory of large cities is usually divided into smaller A simple institutional model for waste management roles zones and waste management functions or tasks are del- and functions comprises two administrative levels where egated to separate administrative units below the cen- at national level the Ministry of Environment (or equiva- tral administration of the city. For example, the city of lent) is responsible for overall waste management policy Bucharest, Romania is divided into six district admin- and local authorities are responsible for organizing waste istrations and each district is organizing independently management services within their territories. Such two- the waste collection services while the treatment and level administrative structures are common in countries disposal operations remain at the responsibility of the with relatively small population and/or geographical area. central city administration. Countries with larger populations and/or large geograph- ❚ Intermediate level tier, in the form of state, provincial ical areas typically have some form of intermediary level or regional authority. This level of government differs authority to plan, implement and monitor the much greater distinctly between federal and non-federal countries: scale of infrastructure and resources that are required in In federal countries, states normally take on some of the this context. Because capacity constraints within local responsibilities that, in non-federal countries sit at the authorities may prevent them from undertaking the plan- national level, such as the responsibility for setting legis- ning and development of large-scale waste management lation and enforcing regulations. Examples include India infrastructure, which is also not a practical role for cen- and Brazil, where central institutions have responsibility tral governments, an intermediary tier becomes neces- for waste management but where many responsibilities sary. The intermediary level authority may be in the form are delegated to state level. In some countries, such as of state level government (in the case of federal countries) Belgium, waste management functions are delegated to or regional, provincial or county level tier in non-federal entity governments and are minimal at the central level. countries. It is important to appreciate that there may be more than three tiers though rarely in these cases are all ❚ In non-federal countries, this intermediary tier is often tiers engaged in waste management. comprised of some form of regional, provincial or county level authority. For example, the Republic of Korea has For the purposes of considering the different institutional 17 provincial governments and 226 municipalities. The roles and functions with respect to waste management, primary responsibility to manage municipal waste lies this paper will consider three main administrative tiers: with the municipal governments while the provincial and national governments provide technical, financial ❚ Central government tier, where responsibility for pol- and institutional support. icy making, legislation and regulatory oversight roles normally sits. Planning, fund management for capital It is important to recognise that, in some countries, the expenditure and data management roles also often sit intermediary tier for waste management does not corre- spond to existing administrative borders. For example, at this level. Bulgaria has 28 administrative regions whereas only 16 ❚ Local authority tier is typically responsible for waste Regional Inspectorates for Environment and Water deal management service delivery, local policy making, mon- with issuing permits for certain waste management opera- itoring and regulatory activity. A local authority may be tions and implementing control over waste treatment and split into a number of subsidiary levels (e.g. district and disposal facilities. Some counties do not have an interme- diary tier at all. municipal authorities). A very specific case is the European Union (EU), where Local authority is defined differently by countries. common policy and legal requirements obligatory for EU In Moldova for example an individual settlement or Member states is defined by EU Institutions, such as the very few closely located settlements are local author- EU Commission and the European Parliament, which sit ities, whereas in Belarus, local authorities com- above the national level. prise of a significant number of settlements around a local administrative centre and have a territory of In the context of tiers, economy of scale is an important several thousand square kilometres. The size of the factor, particularly for small local authorities which do not local authority can also differ significantly — from have the capacity to properly plan, implement and finance 12 2 Creating the right institutional structures waste management services. Economies of scale are import- level government, while local authorities are responsible ant considerations when establishing waste treatment and for service delivery. For example, in Australia, the national disposal infrastructure where economic efficiency depends government is responsible for setting the strategic direc- on being able to meet minimum capacity requirements. In tion for waste management through national legislation, this regard, it is common that countries with large num- policy and strategies. The eight State and Territory gov- bers of small local authorities face difficulties in organiz- ernments set sector targets and implementation plans ing waste management services, especially in rural areas. for their territories. The State/Territory governments also A common solution to this problem is intermunicipal coop- set out the statutory responsibilities for local authorities eration, whereby local authorities cooperate to jointly plan within their jurisdictions. While the roles and responsi- and deliver services. In many cases this is a voluntary col- laboration, albeit often with incentives and encouragement bilities of local authorities vary from state to state, local provided by national and intermediary level government. authorities are generally responsible for the provision of waste services consistent with the policies and obliga- For example, in Brazil, municipalities are responsible for tions set by the upper tiers. the delivery of solid waste management services. However, with over 5,000 municipalities, approximately 90 percent ❚ Non-federal three tier system, with central government of which have populations below 50,000 inhabitants, the setting policy and the legislative framework, an interme- National Policy on Solid Waste12 encourages the formation diary tier providing planning and co-ordination, and local of public consortia to deliver more cost-effective and effi- authority responsible for service delivery. For example, cient solid waste management services. The policy also South Africa has a tree-tier system (called ‘spheres’) with states that municipalities that choose to enter into con- national, provincial and local levels of government. The sortia arrangements for waste management have priority local level distinguishes between metropolitan, district access to national government resources13. and municipal levels of government (see Box 1). 2.4 The division of roles and functions ❚ More than three tier system. Some countries have four between administrative tiers administrative tiers, but the fourth tier does not have significant responsibilities for waste management. For There are broadly four different models for the arrange- example, Chile has a four-tier system of government com- ment of waste management roles and functions across dif- prising the national level, regions, provinces and munici- ferent administrative tiers: palities. Regional and provincial administrations function ❚ Two tier system, with central government setting pol- as branches of the national government, have some terri- icy and the legislative framework, and local authority torial planning responsibilities but play only a minor role being responsible for service delivery. For example, in in environmental management. At the national level, the Morocco, the Ministry of Energy, Mines and Environment Ministry of Environment is responsible for policy, regu- establishes the legal and regulatory framework for the lation and information management. The Environmental sector and has certain monitoring functions; and the Assessment Service is a decentralised technical agency Ministry of Interior provides technical and financial sup- under the Ministry of Environment, based at the regional port to local authorities which are in charge of all oper- level, responsible for environmental impact assessments ational aspects. (EIA), including an information system on environmen- tal permits. The Environmental Superintendence office is ❚ Federal three tier system, with central government typi- responsible for compliance monitoring and enforcement cally setting the overarching policy context and legisla- of certain activities. Municipalities are responsible for tive framework but with much of the responsibility for land-use planning and solid waste management services, policy-making, planning and regulation delegated to state among others.14 12 Brazil Law No. 12,305, August 2010 and Decree No. 7404, December 2010 13 Firmino Silva, W., Imbrosi, D., Madeira Nogueira, J., Municipal Solid Waste Management: Public Consortia as an Alternative Scale-Efficient? Lessons from the Brazilian Experience, 2017 14 Environmental Performance Reviews: Chile 2016, OECD 2016 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 13 Box 1 South Africa – three-tiered government responsibilities for waste management I n South Africa, the 1996 Constitution establishes three tiers of government: national, provincial and local. Local authority is further subdivided into metropolitan, dis- trict and local municipal levels of government. The mandates of each tier of government are outlined in Schedules 4 and 5 of the Constitution and further defined in the Municipal Structures Act15. Institutional roles with respect to waste management are set out in the Waste Act (2008). At the national level, the Department for Environment, Forestry and Fisheries (DEFF) is the lead agent for waste management-re- lated functions, including developing policy, national strategy and legislation, setting norms and standards, establishing and maintaining the National Waste Information System, monitor- ing, auditing and review, licensing waste disposal facilities and capacity building. There is a designated national waste man- Trash can on the beach in the borough of Umhlanga, Durban, South Africa. Photo: © Timothy Hodgkinson | Dreamstime.com. agement officer, authorised to coordinate matters related to waste management on a national level. Other central government departments with waste-related implementation of waste collection services; implementation responsibilities include: (i) the Department of Cooperative and enforcement of waste minimisation and recycling initia- Governance, responsible for supporting municipalities to pre- tives and, promotion of the development of voluntary part- pare integrated waste management plans. This department nerships with industries; support to DEFF in planning for and also coordinates the strategic framework for local authority assessing the feasibility of regional waste treatment; qual- capacity building and engagement with traditional Chiefs in ity assurance of the ‘Waste Information System’; supports the development of local authority capacities. As required by the rural areas regarding waste management within their ter- Waste Act, each of the 9 provincial governments has a des- ritories (the Chiefs are normally responsible for financing ignated waste management officer, authorised to coordinate the waste collections in their areas); (ii) the Department of waste related matters in the respective province. Public Works which oversees the setting of norms and stan- dards for the municipal infrastructure grants; (iii) National Local authorities are also obliged to designate a waste man- Treasury responsible for fiscal policy with respect to waste agement officer in their administration. The local author- management. ity level is split between district and local municipalities. Typically, 3-4 local municipalities are located within a sin- Provincial and local governments may develop their own leg- gle district. Local authorities are responsible for providing islation and strategies, in line with national policy, to meet waste management services and the management of waste their specific needs. Provincial governments ensure that the disposal facilities. Other responsibilities include preparation national waste management strategy and national norms and implementation of integrated waste management plans; and standards are implemented at provincial and local level. implementation of waste minimisation and recycling initia- Responsibilities at provincial level include development of tives; collection of data for the Waste Information System; provincial guidelines and standards, which are in accordance and delivery of public awareness campaigns. with the national strategy and standards; assistance to local authorities in the development of municipal waste manage- Responsibilities such as policy making, legislation, regula- ment plans; enforcement of provincial regulations for gen- tion and distribution of funds remain within the authority of eral waste collection, and support to local authorities in the the national and the respective provincial government. Local Government: Municipal Structures Act, updated July 5, 2011, http://www.saflii.org/za/legis/consol_act/lgmsa1998425/#:~:text=To percent20provide 15 percent20for percent20the percent20establishment,established percent20within percent20each percent20category percent3B percent20to 14 2 Creating the right institutional structures Another example is the United Kingdom, which has three corresponding WCAs. Several district and borough coun- levels of local authority - county, district, and parish coun- cils (i.e. WCAs) can be under the jurisdiction of one county cils. Local authorities are also classified according to their council (i.e. WDA). Single-tier authorities, i.e. Unitary waste management structures and responsibilities, as Authorities (UA), manage both the collection and disposal either Waste Collection Authorities (WCA), Waste Disposal of waste and do not have an overarching county council. Authorities (WDAs) or Unitary Authorities (UAs). WCAs are Parish councils, the lowest tier of local government, do not District or Borough councils and are responsible for the typically have any responsibilities for waste management. collection of household, commercial, and industrial waste Table 1 summarises the typical split of waste management in their area. WDAs are typically county councils and are roles and functions described in section 2.2 between dif- responsible for the disposal of waste collected from their ferent administrative tiers. Table 1: The division of roles and functions between different administrative tiers of government Role and function Central government tier Local government tier Intermediate tier Policy maker Overarching policy for waste Some policies may be developed In federal countries, overarching management needs to be at the local level where they relate policy for waste management can Policy development developed at the national to local targets and objectives for be fully or partly delegated to the level together with targets and waste management. state level. objectives for the sector. In federal countries the state level may have some responsibility for establishing the legal framework The legal requirements for for waste. Establishing the waste management need to be – legislative framework In non-federal countries, the developed at national level. intermediate tier rarely has the power to establish the legal framework. Local authorities typically have responsibility for adopting local In federal countries state National legislation typically regulations and orders (i.e. bylaws government often has the power defines the obligations and or ordinances) setting the specific to establish regulations on waste responsibilities at the different requirements on how waste services management. Defining specific administrative levels and are organized within the specific regulations for the different actors (e.g. In non-federal countries the territory. Obligatory sanitary government, business, waste intermediate tier does not usually cleaning schemes can also be a form management operators, waste have powers to create regulations, of local regulation. Local regulations generators, etc). albeit there are some exceptions16. are also used to define service charges (tariffs). For example, in Belarus the regional government can set tariff. 16 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 15 Role and function Central government tier Local government tier Intermediate tier Planner In federal countries, waste management plans developed at the state level can be combined and avoid the need to prepare a national waste management plan. Central government develops In non-federal countries, regional the national strategy/plan for Development of an implementation plans are often developed to Develop the long- the waste management sector. plan at the local level is important define priorities at the regional term strategic This sets out how the national to ensure that appropriate long-term level and as an intermediate step implementation plan policy is to be implemented. planning is undertaken. Several for coordinating local planning. (also referred to as The general planning and local authorities can develop a If regional waste management strategy or sector plan). policy tasks are often combined common waste management plan. plans provide sufficient detail, at the national level. the need to develop local waste management plans can either be avoided or the scope of the plans can be simplified significantly (e.g. they become more like local action plans) Planning for specific waste treatment and disposal facilities is The planning of necessary disposal Planning of waste and waste recovery capacities is usually done at local level. It can management often delegated from the national be undertaken by groups of local infrastructure (i.e. to the regional level (e.g. for authorities operating under inter- determining the defining the types of facility that Waste infrastructure planning municipal cooperation agreements. capacity and treatment are appropriate for specific service in some countries is done at the Planning for major installations requirements in areas) national level. can be done within local waste specific areas and management plans but also as The development of feasibility identifying prospective part of a wider municipal planning studies (detailed planning) can investment projects for framework or for a more detailed also be moved from the local to development). infrastructure-specific analysis, such the regional level. as a feasibility study. National authorities are The site selection planning not typically responsible process is not possible without Identifying site for selecting site locations the involvement of the local locations for waste for waste management Local authorities typically authorities. Regional authorities management infrastructure but they are identify potential sites for waste can have a role in leading and infrastructure involved indirectly through infrastructure and ultimately make coordinating this process, Identifying and their responsibilities for the choice of the preferred option. particularly when it is intended deciding on waste defining site selection and that several local authorities facility location approval procedures (e.g. should use common waste for Environmental Impact facilities. Assessment). Central government is not normally involved in assessing and developing specific waste Assessment and infrastructure. Local authorities typically lead development of specific Nevertheless, such practices the assessment and development Assessment and development of waste infrastructure exist in limited cases usually of waste infrastructure unless waste infrastructure is often led (e.g. feasibility related to implementation of this responsibility is passed by regional institutions where it studies and contract government priority investment to the intermediate tier or an involves several local authorities. procurement) programs or under agreements intermunicipal cooperation entity. with international financial institutions (IFIs) providing financing for the sector 16 2 Creating the right institutional structures Role and function Central government tier Local government tier Intermediate tier Planner (cont.) Central government must coordinate waste management policy with other sector Regional authorities can be Coordination with policies, instruments and The success of intermunicipal involved in organising effective other authorities, initiatives. It must also ensure cooperation arrangements coordination arrangements with administrative units there is effective coordination depends on effective coordination local authorities, particularly and sectors between activities at the mechanisms at the local level when waste management planning local and regional levels for is organized at the regional level. implementing national waste management policy objectives Central government has oversight of the capacity The intermediary government Improving the capacity of local requirements for the sector, normally has a key role in authorities – in terms of both and often takes the lead in providing capacity-building personnel and skills – to plan, Capacity building engaging with research and support to local authorities. It can manage and implement municipal professional institutions to take the form of direct technical waste management services is a develop waste management- assistance or training support to core requirement. focused training, education and local authority personnel. research initiatives. Data manager Central government sets the Data collection is typically The intermediate level and state framework for collecting and undertaken at the local level. governments typically play a managing waste management key role in coordinating data monitoring data and may also collection and managing waste coordinate data collection at management data. the national level. Service provider Operational planning National authorities are The responsibility for the The regional authorities can of waste management not usually involved in planning of waste collection and have coordination functions for services (including planning waste collection transportation usually belongs to planning waste collection and collection, transport, and transport. However, they the local level. transport. treatment and can have an important role disposal). to play in defining obligatory requirements or technical standards to be followed. Setting service Central government set Local authorities have primary Intermediate government can standards and standards and requirements for responsibility for implementing have a role in setting service requirements specific aspects of services (e.g. the waste management service standards but primarily from source segregation). standards and for ensuring that the perspective of coordinating these are met by their local service activity and for making service providers (public or private). standards consistent across the local authority area. Procurement of This is not a typical function The procurement of waste Part of the procurement functions waste management of national authorities. They management services and, when of local authorities can be infrastructure, service may have coordination and necessary, works and equipment is transferred to the regional level, contracts or related supervisory roles for the usually implemented at local level. especially in cases where several equipment procurement of infrastructure, local authorities are served by a equipment or services financed common treatment or disposal by national public funds or facility. implemented according to agreements with IFIs at the national level. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 17 Role and function Central government tier Local government tier Intermediate tier Service provider (cont.) Operation and No such functions are Organized almost entirely at the The operation and maintenance of maintenance (О&М) of implemented at the national local level. waste facilities can be organized waste management level. at the regional level in a limited Operation and maintenance can be facilities number of cases when the regional delegated to a single local authority administrative unit acts as a or to an intermunicipal entity in contracting authority. the case of a partnership between several local authorities Communications and Central government can An essential role of the local More rarely are public awareness awareness-raising have a role in initiating, authority and operators of waste measures provided at the regional supporting and coordinating management services due to level but they can help provide a public awareness raising their direct interface and point of consistent message across local and educational initiatives. contact with households and other authorities. This ensures consistency but customers generally only relates to cross- cutting issues and messages (e.g. the importance of waste reduction). The coordination and monitoring of information and awareness raising measures implemented through Extended Producer Responsibility (EPR) schemes is relatively common. Engaging with the Where the informal sector Local authority typically has the Intermediary level government informal sector and plays a key role in waste lead role in engaging with informal normally plays a supporting role protecting welfare and management, national level sector workers as part of its waste on informal sector issues, helping livelihoods government typically sets the management planning and service the local authority to fulfil its role framework for protecting it and delivery functions. in engaging with the informal integrating it into the formal sector, and implementing national waste management framework policies related to it. (e.g. through specific legislative provisions to protect the livelihoods of informal sector workers and to engage with organisations representing the informal sector). Regulator Permitting of waste The permitting of waste Permitting of facilities or operations In federal countries, responsibility facilities management treatment and is generally not conducted at for permitting of both facilities disposal facilities is usually local level. Nevertheless, the and operations can be delegated organized or coordinated at the local authorities can impose from national to state level. This national level. equivalent mechanisms through responsibility is also sometimes the procurement procedures and delegated to intermediate level in contracts with service providers. non-federal countries. Environmental The monitoring data from Monitoring of waste collection In federal countries, environmental monitoring of waste treatment and disposal services is usually conducted at monitoring is typically conducted management operations facilities such as landfills and the local level. Local authorities at the state level. and the enforcement of incineration plants are usually also have control functions over In non-federal countries, regulations reported and controlled at the littering and illegal dumping of monitoring can sometimes be national or state levels. waste. The local authorities also undertaken at the intermediate receive monitoring data from waste level but more commonly this recovery and disposal facilities on level serves as the basis for their territory. coordinating monitoring data rather than for conducting monitoring activities. 18 2 Creating the right institutional structures Role and function Central government tier Local government tier Intermediate tier Regulator (cont.) Setting environmental Technical standards are Not typically regulated at local In federal countries, technical and and technical standards typically set at national level authority level. environmental standards may be for waste management by a dedicated unit or body. set at state level. Such environmental and technical activities This links closely to regulations standards can be established set by the policy-maker but through technical specifications standards are typically not set set for the procurements of waste in law. management services Contract management This is not typically undertaken Administering and monitoring Contract monitoring may be and performance at the national level. service and infrastructure contracts conducted by intermediate supervision and ensuring that third party government where that tier is the service providers meet contract contracting authority. requirements are typically local government responsibilities Financing Operational financing The operational financing of Primary responsibility for financing In some countries funding support waste management services is waste management services sits for operational expenditures is primarily a local responsibility. with the local level. Funding can provided via intermediate level Nevertheless, many countries be provided from earmarked government transfers to local support operations at the local taxes, service fees or direct authority budgets. local level via transfers from transfers from the local budget. the state budget or from other sources of public finance. EPR is also a key potential revenue source. Setting fees and tariffs The rules for setting tariffs for Local government has responsibility In some countries the fees applied waste management services for determining and levying user at local level are regulated at are usually defined at national charges (tariffs), assessing their regional level. level. affordability to users, and deciding on the appropriate mix (if any) of user charges and budget transfers needed to operate the services on an affordable and sustainable basis. Capital finance for Central government will often Local authority has prime Intermediate level government development of waste provide grant support to part responsibility for funding capital often provides support towards infrastructure and finance municipal investments infrastructure but will often do capital intensive waste purchase of equipment in waste management this by seeking support from management projects. and vehicles infrastructure. Support can be intermediate tier or central in the form of transfers from government and/or through private the state budget or financing investment. through various state managed programs or funds Other Appointment of Institutions at all levels personnel are responsible for the appointment of necessary personnel Training of personnel Institutions at all levels are responsible for the training of necessary personnel Bridging the Gap in Solid Waste Management | Governance Requirements for Results 19 2.5 Critical functions within each role Treating waste management as a Where waste management and infrastructure need to be priority must go beyond formal political improved, and especially where a step change in service declarations and be supported through level is needed, attention should be paid to those criti- the allocation of sufficient administrative cal functions and issues within each institutional role and resources within the competent administrative tier with most bearing on sector perfor- mance. These are briefly outlined below and discussed in authorities at different levels and, when further detail in subsequent Chapters. necessary, increased public spending to support the sector’s development. 2.5.1 Policy maker role must go beyond formal political declarations and be sup- The policy maker role is responsible for formulating, defin- ported through the allocation of sufficient administrative ing and coordinating a coherent policy direction for the resources within the competent authorities at different sector and setting the overarching legislative framework levels and, when necessary, increased public spending to for its implementation. Critical functions and issues that support the sector’s development. need to be addressed include: For example, the Republic of Korea went through a dramatic ❚ Waste management, almost universally a local authority improvement of its waste management sector. Over the responsibility, needs to be identified as a priority by the course of few decades, it managed to decouple waste gener- central government, (central government tier) ation from economic growth, on account of fully committed leadership, a large cadre of technical staff with expertise, ❚ A clearly assigned institutional leader should be supported by a conducive legal, institutional and financ- assigned with responsibility for waste that is adequately ing environment and intense communications and public resourced, (central government tier) outreach. The world’s most populous country, China, often ❚ A streamlined legislative framework and supporting criticized in the past for not adopting strict environmen- regulatory system is needed and should be established tal standards, has recently implemented an ambitious pro- to support the overarching policy objectives for the sec- gram to improve waste management in the country with tor, (central government tier, intermediate tier) particular focus on plastics. Within a period of less than two years a new Solid Waste Law17 was adopted together ❚ Local policies to help achieve national priorities and with more than ten pieces of secondary regulations and local regulations are needed to spell out the require- policy opinions setting up a broad scope of requirements ments for organizing the services and assigning respon- that prohibit the use of specific single-use plastics, estab- sibilities, (local tier) lish obligatory separate collection requirements, define minimum recycling targets and develop new standards and Identifying waste management as a priority issue at cen- requirements for sustainable use and consumption. tral government level The importance of defining a clear lead ministry for waste It is critical that waste management is recognised by cen- management tral government as a priority activity. Central government must understand and communicate the impacts of poor When considering institutional structures that oversee waste management on society, environment and the econ- waste management at national level, different roles could omy, and the benefits of improved waste management. If be concentrated in one government institution or divided waste management is not seen as a priority issue, then it between several authorities. A key factor that enables is unlikely that there will be the motivation (or resources) central government to provide clear direction for the sec- to support effective action. This situation is observed in tor is the designation of a single ministry or government countries where waste management is still a fringe ser- department as the clear institutional ‘lead’ to formulate vice which has not yet been identified as a priority by cen- needs, lead reform, drive change, provide direction and tral government. Treating waste management as a priority galvanise the sector. This is particularly important given Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution Caused by Solid Waste (‘Solid Waste Law’), amended, 17 September 1, 2020 20 2 Creating the right institutional structures the fact that waste management is inherently a cross-cut- was created in 2018 to discuss and define objectives, ting issue, likely to impact upon the activities of other goals and actions for the sector. The Secretariat is chaired ministries or government departments, including environ- by a representative of the Ministry of Environment ment, local authority, land use planning, industry/busi- and includes representatives of the Ministry of Health, ness and finance/treasury. the Undersecretary of Regional and Administrative Development of the Ministry of the Interior, the Ministry For example, in Estonia, the Ministry of Environment is the of Social Development, and the Ministry of Housing and national lead authority in the field of environmental pro- Urban Planning. It may include additional representatives tection and, specifically, waste management. The Ministry of municipal associations and other authorities. A similar is responsible for the development of national waste man- secretariat exists at the regional level to disseminate the agement legislation and national plans and programs in National Waste Policy and its action plan to all levels of the field. The functions of the Ministry of Environment the State and to other stakeholders such as civil society at national level are supported through several execu- and the private sector. tive bodies: the Environmental Board that issues environ- mental permits for waste recovery and disposal facilities A key role of central government (and and gives opinions on local waste management plans, the Environmental Inspectorate18 that supervises all areas state-level governments in federal of environmental protection and as part of these func- countries) is to create the legislative tions implements control over waste management opera- framework that enables policies tions and facilities, the Environmental Agency that deals and objectives to be achieved. Local with the documentation, reporting and analysis of waste authorities have an important role in data, and the Environmental Investment Centre that col- lects landfill tax and other pollution charges and provides setting policy and regulations, in the financing to local authorities, private companies and NGOs form of local bylaws or ordinances, to implement projects in the field of waste management. particularly where these relate to Sometimes responsibilities are split between differ- the requirements placed on waste ent ministries. For example, the Ministry of Environment generators. might be responsible for setting up policy objectives while A legislative framework that supports policy objectives a separate institution is responsible for regional develop- ment, housing and services, coordinating implementation, A key role of central government (and state-level gov- and providing technical support for local governments. ernments in federal countries) is to create the legisla- This division of responsibilities can be effective, provided tive framework that enables policies and objectives to that remits are clear and that the structure promotes pos- be achieved. In countries with federal government struc- itive collaboration and partnership. For example, in India, tures, the responsibilities associated with state level at the national level, the Ministry of Environment, Forests governments are similar to those placed on central gov- and Climate Change (MoEFCC) is the central government ernment, with key legislative responsibilities sitting at body dealing with environmental matters. It is responsible this tier, albeit within a framework determined at the for planning and overseeing the implementation of India’s national level. environmental policies and programmes, including solid Specific central government policy tasks include, for exam- waste. However, there is an important interaction with the ple, establishing requirements and standards towards col- Ministry of Housing and Urban Affairs which has authority lection, recovery and disposal or waste, defining policies over the formulation and administration of the rules and on technology choices such as landfilling and incineration, regulations and laws relating to urban development. setting up recycling targets for certain waste streams, Where responsibilities sit across ministries, coordination defining responsibilities of local authorities for organiz- can be achieved by establishing an executive body with ing waste management services on their territory, forming representation from across government. Such is the case extended producer responsibility schemes, and creating in Chile, where the National Waste Executive Secretariat mechanisms for the financing of services. The Environmental Board and the Environmental Inspectorate have merged into a single agency as of January 2021 following decision issues by the 18 Estonian Parliament. The merger forms part of a wider program of governmental reforms and is aimed at both cost saving and reduction in bureaucracy for citizens needing to engage with government. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 21 Countries seeking to advance their waste management sys- households and commercial and institutional genera- tems need to embark on a process to review and streamline tors (referred to as CII generators19). Local regulations their legislative framework as it relates to waste manage- may remove the need for individual contracts between ment so that it provides a clear enabling environment for the service provider, who holds a geographic monopoly, the sector. The body of law comprising primary and sec- and individual households. Fee setting procedures and ondary legislature as well as executive orders and other fee collection methods should also be defined, as well statutory regulations needs to be aligned in its treatment as penalties for noncompliance. Specifying the need for and provisions on waste management. Complementarity source separation of recyclables from other wastes, or and consistency of legal provisions needs to be achieved. other policies associated with the way that waste gener- For example, in 2018 Azerbaijan adopted a new, compre- ators must present their waste for collection, is also reg- hensive National Waste Management Strategy. To facilitate ulated locally. its implementation, the lead ministry embarked on a com- Local regulation enables local service provision and is prehensive review of the accompanying legal framework. an effective way for local authorities to achieve the spe- It reviewed, evaluated and proposed modifications to the cific requirements set out in national policy. As such, it existing legal and regulatory framework related to waste is important that local policies are developed within the management in the country. The scope of work covered overarching national policy framework. municipal solid waste, hazardous, construction and demo- lition waste and included an inventory of existing laws and For example, in the United Kingdom, local authorities can regulations to identify gaps in the legislation, deficiencies set policies that require householders to store their waste or contradictions. A set of new legal instruments – laws, in a container provided by the local authority. This con- secondary legislation and contractual tools – required to tainer will be of a specific size. Excess waste not within achieve the objectives of the country’s National Strategy the container (e.g. presented alongside in separate sacks were drafted with corresponding amendments to the exist- or uncontained) will not be collected. The use of these pol- ing legal and regulatory framework. icies has been effective in driving waste minimization.20 A supporting regulatory system is also required to imple- In the Republic of Korea, the national Framework Act on ment legislation. It needed to ensure control and mon- Resource Circulation21 requires municipalities to develop itoring of the activities of all service providers, and to local ordinances for specific issues, including the method follow up on the general implementation of local waste-re- of discharging residential waste, the method of fee col- lated and cleanliness ordinances. The framework needs to lection (Republic of Korea operates a ‘pay as you throw’ be clear and recognise the different elements of regula- system, established in 1995), the selection of the private tion relating to waste management: setting environmen- waste hauler for collecting municipal waste, the imposi- tal and technical standards, permitting of waste facilities, tion of a tipping fee on wastes of nearby municipalities, monitoring of operations and wider activities such as ille- and the businesses not allowed to use disposable goods. gal dumping and littering. The responsibilities for differ- ent elements of regulation may be split between tiers and between different executive agencies within each tier (see 2.5.2 Planner role ‘Regulator’ role below). The planner role is to formulate and coordinate the prepa- Using local policies and regulation to achieve national pri- ration of strategic plans for municipal waste management orities and to govern service delivery that conform with government policy and legislation, and for ensuring effective coordination of plan implementa- Local authorities have an important role in setting policy tion across all tiers of government, including performance and regulations, in the form of local bylaws or ordinances, monitoring and data collection. Critical functions and particularly where these relate to the requirements issues that need to be addressed include: placed on waste generators. Local regulation should out- line the roles and responsibilities of the local author- ❚ Establishing a clear framework for waste management ity, service providers, and waste generators, including planning (central tier) 19 CII includes commercial, non-process industrial and institutional generators of municipal solid waste. 20 Analysis of recycling performance and waste arisings in the UK 2012/13, 2015, WRAP 21 Framework Act on Resources Circulation, Act No. 14229, May 29, 2016, latest amendment in 2018, https://www.law.go.kr/LSW/eng/engMain.do 22 2 Creating the right institutional structures It is important to develop and adopt ensuring coordination and alignment of inputs and objec- tives. Often the requirement to develop a strategic plan a long-term strategic plan for waste will be mandated by central government and will include management that sets realistic specific requirements and frequencies. objectives and targets, is consistent with baseline conditions, reflects a thorough In large federal countries intermediate tier plans may replace the need for national plans or, if sufficiently analysis of development options and detailed, may replace the need for local tier plans. The role identifies credible financing sources. of intermediary government can also be to ensure that local authorities develop strategic plans that are in line with cen- ❚ Adopting a long-term implementation plan for the sec- tral government priorities and targets. The intermediate tor (central government tier or intermediate tier in federal authority may then be able to offer a combination of tech- countries) nical support and financial incentives to help achieve those ❚ Waste management planning at local authority level priorities and targets (i.e. making financial support for (local or intermediate tier) waste infrastructure contingent upon local authority strate- gic plans meeting national and state priorities). ❚ Aligning local plans with national plans and policy objectives (all tiers) For example, in the Republic of Korea, under Articles 11 and 12 of the Framework Act on Resources Circulation22, ❚ Establishing a data management framework (central the provincial government is required to develop a five- government or intermediate tier), data collection and year implementation plan that shows how national goals reporting (local tier) and policies will be implemented in the provincial con- ❚ Ensuring sufficient capacity at all levels (all tiers) text. This implementation plan sits under the 10-year masterplan for waste management developed at national Establishing a clear framework for waste management level by the Ministry of Environment. The implementation planning plan must include targets in line with national targets, but Effective waste management planning is a fundamental whilst also taking the local context into account, such as prerequisite for a successful waste management system. capacity of collection and treatment systems. Waste man- Planning should relate to the entire waste management agement targets include ‘final disposal rate’, ‘effective cycle, starting from collection and transportation of waste recycling rate’ and ‘energy recovery rate’. The provincial and all pre-treatment and recovery operations through to government must report progress against targets to the its final disposal in sanitary landfills. Planning addresses central government annually. appropriate waste management data collection tech- niques, analysis of waste composition, waste generation In Brazil, the legally binding National Policy on Solid projection and scenario techniques, formulation of equip- Waste23 regulates the type, hierarchy and content of waste ment specifications, procurement procedures and man- plans. The National Plan for Solid Waste sets objectives agement information systems for effective monitoring, and targets for the Federation which are then defined fur- evaluation and planning revision. ther in State Plans. The State Plans include targets for reduction, reuse and recycling on their territories. Having Planning is a cyclical process and involves all tiers of an operational state plan is a condition for accessing fed- government. It is also a basis for engagement with other stakeholders. Implementation plans define the priorities, eral resources for solid waste projects. State Plans are targets and objectives for the sector, and describe a road- reviewed every 4 years. Municipal Solid Waste Plans are map and timeline for them to be achieved. It is a key mech- developed by individual municipalities. Preference for anism for ensuring that sub-central government planning access to federal and state resources is given to munici- is aligned with national policies and priorities. palities that have entered into regional arrangements with other municipalities or to agglomerations. A planning framework must be established to determine the types of plan needed at each tier of government, Ibid 22 Brazil Law 12305, August 2, 2010 23 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 23 Adopting a long-term strategic implementation plan is necessary to define the specific need for improvements, for the sector to program future waste infrastructure capacity require- ments and to identify other initiatives needed to support It is important to develop and adopt a long-term strate- implementation of the plan the long term, including capac- gic plan for waste management that sets realistic objec- ity building, public awareness raising and communica- tives and targets, is consistent with baseline conditions, tions campaigns. The plan might also specifically identify reflects a thorough analysis of development options and the locations of new infrastructure, although this can be identifies credible financing sources. Central government left as a subsequent step to be decided during the actual has overall responsibility for strategic planning of waste implementation plan. The plans should be prepared at the management to meet national policy objectives. This role local level but, if regional waste management plans pro- relates closely to the waste management policy making vide a sufficient level of detail, the need to develop local role and is often undertaken by the same government unit waste management plans could be avoided or plans could or body. Central government’s strategic planning process be simplified significantly and based primarily on action also serves to make sure that waste management sector planning. policy complements other sector policies, instruments and initiatives. The planning function comes at the beginning of the project planning cycle and is therefore critical to successful waste It is important that strategic plans are realistic in terms of management project development and implementation. what can be achieved over the given timeline, taking account of the given baseline conditions, the necessary institutional Aligning local plans with national plans and policy and legal changes, the ability to finance investments and objectives cover operation al costs, and the potential to secure public A planning process is needed to align municipal and participation and support. Where plans are overly optimis- regional waste management plans with national plans. tic, setting unrealistic objectives and targets, there is a high Individual municipalities should be encouraged to fol- probability that they may not be achieved and that actions low the national plan, especially when building new infra- taken to implement them may fail. structure and facilities, to ensure that development of the A data review and options analysis should precede the sector is consistent and properly coordinated across the formulation of national plans. This involves a situational country and makes efficient use of public resources. assessment, defining and analysing scenarios of potential For example, the National Waste Management Plan for the options, and assessing the costs and benefits associated period to 2025 adopted in Romania requires all 41 coun- with alternative approaches to developing the waste man- ties24 and Bucharest municipality to develop regional waste agement sector. The options analysis should cover legal, management plans for establishing waste management institutional, financial, operational and capacity issues, technical infrastructure and for developing institutional and and examines the various technical options, including financial models for achieving the long-term waste manage- their financial requirements and whether the country can ment objectives. Similarly, in Morocco, which has 12 regions afford them. that are further subdivided into 13 prefectures and 62 prov- It is common to engage external technical specialists and inces, since 2006, municipal waste management plans research institutions to help develop the strategy and have to be fully aligned with provincial/prefectural plans. plans at key points during the strategic planning cycle. Morocco provincial plans are established under the respon- sibility of the Wali (i.e. province governor). While approval The importance of waste management planning at local of provincial plans has been generally slow hindering the authority level overall process, this approach has ensured consistency in Effective long-term planning is an essential function of planning infrastructure at local, regional and national level. local authorities but is one that is often overlooked due to In addition, by law, municipal waste management plans are their primary focus on operations. It is necessary to ensure a prerequisite to obtaining financial support from the cen- that sufficient infrastructure is put in place to provide and tral level, making planning a pivotal element in achieving improve services over the longer term. Long-term planning policy objectives in the waste sector. At NUTS-II level, Romania is divided into 8 regions that consist of 42 NUTS-III units, namely 41 counties and Bucharest Municipality. The NUTS meaning 24 is Nomenclature of Territorial Units for Statistics. 24 2 Creating the right institutional structures In principle, planning of waste facilities and operations negative impacts as far as possible and provide positive depends on having appropriate administrative structures community benefits. and capacities which allow investment projects to be iden- As changing the behaviour of waste generators takes time, tified, formulated and developed. it is important that the plan provides the basis for this In some cases, planning and development of waste infra- long-term endeavour. Planning is an opportunity to pos- structure can be undertaken by intermunicipal coopera- itively engage with and gain the support of other stake- tion bodies or by the intermediary tier of government. For holders, including communities and the informal and example, in South Africa, municipalities are required by private sectors. the Waste Act25 to prepare Integrated Waste Management Establishing data management framework that supports Plans (IWMP). The IWMP should identify infrastructure adequate data collection and reporting requirements, and set priorities, goals and targets for the municipality. A municipality should submit its IWMP to its Strategic planning must be based on good data. This is respective Municipal Council for endorsement and include essential to allow robust analysis of development sce- the approved IWMP as part of its Integrated Development narios for the sector. It supports monitoring of progress Plan (IDP). The integration of the IWMP with the IDP is against targets set out in the plan and provides the basis critical for gaining access to funding. IWMPs are to be for on-going strategic planning. It can also be used for cre- reviewed every five years. To assist municipalities, in 2012 ating incentives (or penalties) for sub-national authorities the national Department for Environmental Affairs devel- to meet local targets on the path towards meeting national oped a Guideline for the Development of Integrated Waste policy objectives. Management Plans26. The overall requirement for collecting and reporting data is normally set by central government. Data collection and Effective long-term planning is an reporting requirements should be defined and standard- essential function of local authorities ized across data entry points (service providers, opera- but is one that is often overlooked due to tors and local authorities) to ensure consistency and allow data amalgamation. Cross checking and verification pro- their primary focus on operations. cesses should also be put in place. Data depository systems are typically placed with agen- Site selection for waste infrastructure is a key but often cies on behalf of the central government, examples being contentious element of the planning process. Waste infra- the national statistics service, the national environmental structure is often unpopular with local communities due regulator and environmental funds. to concerns over potential pollution, odour, noise and dis- ruption. This commonly causes significant challenges and Specific examples are the United Kingdom’s Waste Data delays in developing appropriate waste infrastructure Flow (WDF) system27 and South Africa’s Solid Waste in appropriate places. Sufficient time and resources are Information System (SAWIS). The United Kingdom’s WDF needed to enable a thorough assessment of site needs and is a web-based system for local authorities to report their potential sites to be made. The operations of waste treat- waste data. It serves as the official data collection sys- ment and disposal facilities for a lifespan of 20-30 years tem for the Department for Environment, Food and Rural should be considered during planning, and site plans must Affairs’ Municipal Waste Management Survey. It allows be consistent with population growth, urbanization pro- the government to monitor progress towards national and jections, spatial developments. This aspect is often over- local targets, to produce national statistics on municipal looked. Proactive and sustained community engagement waste, and to provide an evidence base to guide govern- is essential to ensure that the need for waste infrastruc- ment policy. It has also grown to become a useful resource ture is clearly demonstrated and understood, and that for local authorities, which often use it to benchmark their waste infrastructure is developed in ways that mitigate performance against other local authorities. Similarly, 25 Act No. 59 of 2008: National Environmental Management: Waste Act, 2008 26 Available at https://www.environment.gov.za/sites/default/files/legislations/integratedwaste_management_guidelines_0.pdf 27 See https://www.wastedataflow.org/ Municipal solid waste treatment plant in Thailand. Photo: PlotPhoto 25 in South Africa, SAWIS28 was created by the Department institutes and non-governmental professional associa- of Environmental Affairs and is used by government and tions often play a significant role as technical advisors and industry to capture data on waste generation, recycling trainers for government institutions. and disposal in the country on a monthly and annual basis. Ensuring appropriate capacity at all levels of government 2.5.3 Regulator One key, often overlooked, element of the strategic plan- The regulator is responsible for formulating standards and ning process is the need to carefully consider capacity procedures pertaining to the permitting, monitoring and needs in terms of technical skills and human resources. As regulatory enforcement of municipal waste management the responsibilities local authorities have for waste man- facilities and operations and for supervising their effective agement evolve and grow over time as the system develops, application and enforcement. Critical functions and issues so do capacity requirements. However, whilst this issue is that need to be addressed include: most acute at the local authority level where responsibility ❚ Permitting of waste management facilities and opera- for service delivery sits and capacities are often the weak- est, it is prevalent also at the national and intermediary lev- tions (mostly central government or intermediate tier) els of government. It is unlikely that an ambitious national ❚ Control and enforcement of legal requirements (mostly strategy will be achieved without ensuring that the skills central government or intermediate tier) and resources are in place to deliver it. As such, the strategic planning process should include consideration of the capac- ❚ Contract administration and inspection (mostly local tier) ity needs of each tier of government and include adequate provision and mechanisms to enable them to develop. In the Permitting of waste management facilities and operations context of a situation whereby a step change in waste man- The responsibilities of approving environmental impact agement service provision has been successfully achieved, assessments, issuing environmental permits, performing change has often been accompanied by a wide range of sup- environmental monitoring of waste management facili- port initiatives and accompanying incentives. ties and of industrial waste generators are typically also Capacity needs assessments should be undertaken as functions of the two upper tiers. At the central level, these part of overall planning activities. In federal countries or functions may be split between the responsible ministry countries with many small local authorities, the interme- and separate executive agencies engaged specifically in diary tier normally provides technical capacity-building permitting, monitoring and regulatory enforcement. For support. This ensures consistency in approach amongst example, in Ghana, the Environmental Protection Agency local authorities. Professional organizations, technical (EPA) under the Ministry of Environment and Science acts See http://sawic.environment.gov.za/ 28 26 2 Creating the right institutional structures as the regulatory authority, supervising and monitoring Central authorities should consider establishing appropri- the activities of service providers within the metropol- ate coordination and enforcement mechanisms to support itan, municipal, and district authorities. The EPA is also the compliance at local level. For example, these can include responsible for the management of hazardous waste and reporting obligations for local authorities, procedures for issuing permits for waste treatment and disposal facili- consultation, and approval and monitoring of the imple- ties. In Morocco, the development of any waste manage- mentation of local waste management plans. Such enforce- ment facility is subjected to a comprehensive EIA, since ment mechanisms should also be combined with guidance, 2003. The Committee for Environmental Impact Studies training and financial support to local authorities. is in charge or organizing public consultations as well Contract administration and inspection as reviewing and approving the study. This Committee is an inter-ministerial entity and includes local adminis- At the local level, the ‘regulator’ role is required to assure trative entities ensuring broad stakeholder participation. control and follow-up to the activities of all third-party Surveillance and reporting regarding facilities is orga- service providers, and to follow up on the general imple- nized at the central level by the Ministry of Energy, Mines mentation of local waste-related and cleanliness ordi- and Environment. An environmental police force has nances. Administering or enforcing the terms of contracts signed by a municipality with waste management facility been formed to reinforce the monitoring capacity of the operators or service providers is typically a local author- Ministry. It is worth noting that, until now, all municipal ity function. The contracts administration role addresses waste facilities are developed by public entities, leading the waste management projects development and tender- to a relatively easier dialogue and enforcement as com- ing, contacts management and contractor payment and pared to other sectors. penalty control of the project cycle. The associated tech- Control and enforcement of legal requirements nical inspection function normally has the responsibility for monitoring compliance with facility construction works Monitoring and enforcement are often split between tiers and thereafter operational requirements in contractual of government. A common division of activities is that and associated local regulatory documents. the local authority focuses on taking enforcement activ- ity against waste generators (i.e. for littering or illegal It is important that the regulatory function is separated dumping) whilst central and intermediary levels of gov- within the municipal administration from the waste man- ernment focus on enforcing compliance of facilities’ oper- agement services or activities which must be overseen and ations (i.e. discharge or emission limits). For example, regulated. This is fundamental, as it must avoid any real or in England waste management operations, such as land- perceived conflict of interest between those regulating a service and those providing it. fill operations, are regulated by the national environmen- tal regulator, the Environment Agency. The Environment For example, in Brazil, responsibility for contract adminis- Agency also takes enforcement action against large scale tration and inspection depends on whether the contract is illegal dumping and illegal activities involving hazardous funded by municipal or federal funds. If the work is carried waste. However, enforcement against small scale dump- out using municipal funds, each municipality should des- ing of waste and littering is conducted by local authority ignate a municipal secretariat to supervise the work. If the enforcement officers. work is carried out with federal government funds, monitor- ing and inspection is done by the Caixa Econômica Federal, It is important that the regulatory a public bank dedicated to financing environmental infra- function is separated within the structure. Operational supervision remains a responsibility of the municipality and is typically carried out by the secre- municipal administration from the waste tariat responsible for solid waste management. management services or activities which must be overseen and regulated. This is 2.5.4 Service provider fundamental, as it must avoid any real The service provider is responsible for the actual deliv- or perceived conflict of interest between ery or assurance of delivery of the waste management ser- those regulating a service and those vices and facility operations. Critical functions that need providing it. to be fulfilled include: Bridging the Gap in Solid Waste Management | Governance Requirements for Results 27 If there is a consistent message on waste identified. Costs need to comprise direct operational, amortization, and overhead costs, and be based on an management coming from all tiers of accounting system identifying the cost components sep- government, then it is easier for the local arately for each type of activity from street cleaning and authority to establish a ‘social contract’ collection through treatment and landfilling. Realistic with generators, thus encourage positive financing sources need to be identified for both operat- behaviors in waste management. ing expenses and capital investments. Financing is ideally based on the principles of polluter pays, affordability, full ❚ Operational planning, operations and maintenance of cost recovery, and economic efficiency (see Chapter 4). waste management services and infrastructure, (local tier) Dividing client and operator functions in service delivery and operation of facilities ❚ Dividing client and operator functions in service deliv- ery and operation of facilities, (mostly local tier, or inter- The operational plan will typically determine where pri- mediate tier on behalf of local authorities) vate sector participation will be sought as a source of additional capital, technical expertise (especially for ❚ Communication and awareness-raising (mostly local treatment facility operations), and efficiency gains. When level) the private sector is engaged to deliver public services, ❚ Local authority’s key role in engaging with the informal the client local authority is expected to have capacity to carry out tendering procedures and perform contract man- sector (local level) agement functions. Key metrics and performance indica- Operational planning, operations and maintenance of tors are included in the contracts. waste management services and infrastructure For example, in the United Kingdom, contracts between the Local authorities are typically solely responsible for opera- local authority and the operator will typically include met- tional planning, operation and maintenance of waste collec- rics for monitoring the service that directly link to the local tion and transportation. Treatment and disposal planning authority’s national reporting requirements. Similarly, in can also be their responsibility but may be transferred to Ghana, where the National Procurement Act (2003) makes the intermediate tier. Operations and maintenance of such competitive bidding for the selection of private waste facilities may similarly be done entirely by local authorities companies mandatory for the Metropolitan, Municipal or be transferred to the intermediate tier or to an intermu- and District Assemblies (MMDA) tender boards, contracts nicipal entity on behalf of the local authority. include metrics and key performance indicators (KPIs) and are monitored by the MMDAs30. Similarly, Morocco has over Operational plans need to provide ample detail on how the past 20 years succeeded in engaging the private sec- the service will be organized and financed. Various models tor in waste management operations, with more that 70 exist and the authorities need to determine the horizontal percent of the urban population serviced by private opera- split (zoning or a single service area), vertical split (sin- tors. Through this process, municipal entities have acquired gle or multiple providers along the service chain from col- extensive experience in structuring their relationships with lection through disposal), interface arrangements (when private operators, developing performance-based con- waste changes hands between, for example, primary and tracts and use of technology to monitor performance. While secondary collectors or secondary collection and transfer operator’s remuneration still primarily relies on tonnage, point), service levels (in high-rise and sparsely populated contracts increasingly include a comprehensive suite of areas) and method of collection (comingled or separated indicators. Performance indicators systematically reflect waste), thresholds for serving CII generators, waste diver- recycling objectives and include incentivized remunera- sion level and treatment methods29. tion for diverted volumes. Other indicators emphasize the Operational planning also includes budgeting where pro- quality of services such as regularity and container clean- jected costs, revenues and financing sources must be liness. Indicators on energy use and carbon emissions are 29 For further discussion on models for operations of waste management services, see: Operator Models. Respecting Diversity. Concepts for Sustainable Waste Management, GIZ, 2018 30 Sampson Oduro-Kwarteng, Meine Pieter van Dijk and Kafui Afi Ocloo, Urban Governance in the Realm of Complexity, Chapter 6: Governance and Sustainable Solid Waste Management in Ghana, 2017 28 2 Creating the right institutional structures rarely used. The largest contracts in Casablanca and Rabat Communication campaigns need to be carried out on a leverage information technology such as closed-circuit cam- continuous basis. Local authorities should ensure they eras, fleet tracking, radio frequency identification badges, in have specialized staff and a dedicated yearly budget allo- order to monitor performance and reduce potential disputes. cation for this activity. Alternatively, the communication activities could be delegated to the waste management Where the local authority is both the client (i.e. the body company or could be a required function of the industry that sets the scope and standards for the service and under EPR schemes. ensures that it is delivered to the required standard) and the operator (i.e. the service provider), the separation There are considerable benefits associated with support of these two functions within the institution is import- on communications issues coming from central govern- ant. This could be achieved by establishing a public com- ment and/or intermediary government. If there is a con- pany with separate local budget financial statements or by sistent message on waste management coming from all ring-fencing the activities of the service unit and possibly tiers of government, then it is easier for the local author- its accounting systems for dedicated cost allocation. For ity to establish a ‘social contract’ with generators, thus example, in Bulgaria a dedicated municipal enterprise was encourage positive behaviours in waste management. set up in Sofia municipality to operate the city’s 410,000 This ensures consistency is more economic where aware- tonne per year residual waste mechanical-biological treat- ness-raising materials and radio or television campaigns ment (MBT) plant and installations for composting and for instance can be created much more efficiently, with anaerobic digestion of separately collected green and local authority able to tailor materials for local use. food waste. The Waste Management Directorate is the unit within the municipal administration responsible for the Local government’s key role in engaging with the informal overall planning of municipal waste management whereas sector control activities over providers of waste collection ser- The informal sector plays a significant role in waste recy- vices are designated to the Municipal Inspectorate. cling and diversion. Many countries have no formal separa- Coordinating communication and awareness-raising tion at source or recycling system in place yet still achieve activities between different tiers of government good recycling rates and diversion through the informal sector. Integrating informal workers with the rest of the Communications need to be tailored to local cultures and waste chain improves the interface between operators, contexts. As such, local authorities are typically charged reduces competition among collectors and may reduce lit- with leading on communicating with waste generators. ter and secondary dumping. It promotes social inclusion At a basic level, communication might simply focus on and better health and safety conditions. informing householders of the nature of waste manage- ment services and the cost. However, it is likely that the Local government has the lead role in engaging with the local authority will need to engage with generators on informal sector when planning and providing the service. behaviour change issues, encouraging generators to Many and diverse schemes exist for organizing communi- reduce waste generation and to participate in recycling ty-based organizations and social enterprises and they are schemes. This is a critical, and often overlooked, element highly dependent on local culture, tradition, socio-eco- of waste management service provision. Without positive nomic conditions. Often these schemes differ greatly not engagement from the households, businesses and insti- just within a single country but within large cities. tutions generating waste, the waste management system Local government could actively research, document and is likely to encounter challenges, often with widespread promote successful models in terms of defining the ser- dumping and burning of waste, limited engagement in vice zones for primary collection, zone boundary modi- recycling initiatives and lost opportunities to reduce fication and expansion over time, setting and collecting waste. service charges, incentives for service expansion into For example, when Ningbo, China, embarked on an ambi- low-income and slum areas, monitoring and enforcement tious separation at source program, it managed to achieve of residual waste disposal, examples of intermediary asso- high citizen participation rates and good performance over ciations/non-governmental organizations (NGOs) to facil- a very short period of time, which was largely attributed to itate the dialogue between informal workers and local intense community awareness and engagement campaign. administrations. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 29 For example, in Liberia, the municipality of Monrovia Waste management is a net cost activity established zones for primary waste collection that were assigned to community-based enterprises (CBEs) reg- which has ultimately to be paid for – in istered with the municipality. The area assignment was one form or another – by residents. It made following extensive research of existing practices. follows that the services provided should The baseline of customers was determined and each CBE be affordable to most users. committed to gradually expand collection to previously unserved households. Performance indicators were agreed waste management service and facilities. Critical func- on, including number of households served, and adjusted tions and issues that need to be addressed include: on an annual basis to allow monitoring against set targets. CBEs charged generators directly while the municipality ❚ Defining an affordable and financially sustainable waste provided training and tools. management service Community-based measures of stakeholder engagement ❚ Deciding how initial investments and also medium and for solid waste management have been implemented long-term capital costs are to be financed successfully also across India. Such is for instance the ❚ Deciding on cost recovery policy and how the recurrent inclusive model of engaging women self-help groups like Harith Karma Sena (Green Task Force) under Kerala State’s costs of service delivery are to be funded women livelihoods mission (Kudumbshree). The integra- ❚ Maximising revenue collection tion of women self-help groups into the waste manage- ment system has been formally recognized in the State’s ❚ Establishing capacities for developing large-scale solid waste management policy and the groups’ activi- investment projects and for applying for financing ties are recognized as part of the State’s efforts related to Defining an affordable and financially sustainable waste information and education campaigns, waste collection, management service segregation and various waste management activities. The engagement modality specifically aims to develop As indicated in Table 1 above, responsibility for financ- green eco-friendly enterprises around Kerala and assist ing municipal waste management rests primarily with the Haritha Karma Sena members in getting additional income local authorities31. Responsibility for formulating tariff and promoting the local level entrepreneurship while con- policy, legislation and related guidelines falls typically to tributing to waste management activities. This involves central government. Central government, and sometimes establishing local women enterprises of 4 to 10 members intermediate government, also have a key role to play in for ward-level activities and creating a consortium of such determining the amount and conditions of any grant sup- enterprises at the level of the urban local body (ULB) to port which may be provided to a municipality, particularly ensure the rights of Harith Karma Sena members and coor- if it is to be from national or international sources. Under dinate enterprise activities with these by the ULB. In coor- these circumstances, preparing the funding for a waste dination with ULBs, the consortium has the right to take management project should ideally be a collaborative pro- decisions, establish a fund for purchase of equipment, cess between the municipality and the central government determine user fees, and carry out other administrative (and the intermediate tier if appropriate). and entrepreneurial decision making responsibilities to streamline the integration of such groups in the overall Waste management is a net cost activity which has ulti- waste management system. mately to be paid for – in one form or another – by residents. It follows that the services provided should be affordable to most users. This is a critical objective which provides a 2.5.5 The financing role focus for decision making on the scope of the services that The institutional structure in charge with financing is can realistically be provided and funded on a sustainable responsible for all financial aspects of preparing and deliv- basis. In preparation for making this decision, it is neces- ering affordable and financially sustainable municipal sary for a municipality to undertake a high level of detailed Variations exist depending on how responsibilities for the core waste management activities are allocated. For example, larger municipalities may be 31 responsible for funding all of waste collection, treatment and disposal, whereas smaller municipalities may have responsibility only for waste collection (with onward treatment and disposal at regional or inter-municipal facilities being covered by a gate fee). 30 2 Creating the right institutional structures technical analysis, key aspects of which are referred to international capital markets and International Financial below and considered in greater detail in Chapter 4. Institutions (IFI) funding. Significant involvement is likely to be required from the municipal accounting team for Considering that true costs are often hidden among other deciding on the mix of funds that might be used, includ- non-waste related services or are simply unknown, identi- ing a municipality’s own reserves, debt and grants and for fying costs fully and transparently is key to organizing ser- gauging the implications of alternative funding mixes for vices in a cost-efficient manner. the municipality and for tariffs. Defining an affordable service entails undertaking a thor- This is the time also when a decision may need to be made ough technical and financial feasibility assessment of project options, calculating indicative tariffs based on on whether the services should be provided and financed recovering costs in full, comparing these with tariffs cal- by a municipal public collection company or by a pri- culated through a separate household incomes and afford- vate operator. Decisions at this stage can influence how ability assessment, and identifying a preferred technical the related service costs will be financed and charged to option. This is detailed and specialised work that may best households and legal entities. be undertaken by external consultants working closely Also, if grant funding is available and can be used in the with a municipal project team. It is crucial that the analy- financing mix, it should be decided how the grant funded sis is based on the full investment and operating costs of assets will be refinanced at the end of their economic lives. the services being proposed and that the affordability con- This has important implications for setting the rate of the straints on what can realistically be achieved are fed back tariff. For example, grant funding may enable a lower tariff into the analysis and used in the design of the system. to be introduced at the beginning of operations and for it When full cost recovery through waste management ser- to be progressively increased to the full cost recovery level vice tariffs is not realistically achievable, subsidies and when major assets come to be replaced. A skilled econom- budget support could be necessary to achieve policy ics and accounting team is needed to undertake this kind objectives. of analysis. Deciding how investment costs can be financed Deciding on cost recovery policy, user charges and municipal funding Funding for waste management investments is poten- tially available from sources including municipal reserves, National legislation typically sets the requirements or central and regional government transfers, local and mechanisms for levying waste management fees and taxes Motorbike for waste collection in Avepozo, Togo. Photo: Africanway Bridging the Gap in Solid Waste Management | Governance Requirements for Results 31 consistent with national policy and strategy on the user the relevant financial administrative unit within the local (polluter) pays principle. It may also define thresholds for authority. affordability analysis and the conditions to apply on pro- There are many instances of local authorities within the viding income-based support to low income and vulner- same country collecting either fees or taxes depending able households (possible based on population deciles). on the specific local regulations approved by their local The actual fee and tax rates are generally determined from councils. In Bosnia and Herzegovina, for example, some local authorities’ unit rates and established in local ordi- local authorities collect fees directly from households nances following approval by local councils. whereas others have assigned this function to private While many countries have adopted the user (polluter) collection operators. In Veneto, Italy, fees are collected pays principle, in practice it is often applied only to a pro- in some municipalities under pay-as-you-throw vol- portion of operational costs with the balance being cov- ume-based schemes whereas taxes apply in others where ered by general municipal revenue. Clearly defining its volume-based charges do not apply. cost recovery policy, objectives and charges, based on a Establishing capacities to develop large investment proj- full understanding of its costs, enables a local authority ects and apply for financing to manage its services on a more commercial basis in line with their being affordable to users and financially sus- At the local authority level, additional administrative tainable. This important aspect is considered further in capacity is needed to attract investment finance for the Chapter 4. In order to manage the financial function in this development of local or regional waste treatment and dis- way the local authority will require the services of a com- posal facilities. For this it is important to have staff with petent accountant/financial manager, clerical support, and the skills needed both successfully to apply for funding well-organised data bases on the operational and financial and to manage large investment projects. This requires performance of the waste service. knowledge of international procurement rules and of internationally recognized framework contracting proce- Improving revenue collection dures, such as the International Federation of Consulting The types of administrative structure and procedures Engineers (FIDIC). needed for revenue collection vary between the types of For example, in 2008 the Government of Azerbaijan charging mechanisms used. For example, raising revenues launched an Environmental State Program aimed at through local taxation depends on the local administration addressing the wide-spread pollution of the Absheron having the capacity to collect taxes from residents and to Peninsula that surrounds the capital city, Baku. Waste man- manage budgets across the breadth of services within its agement was one of the priority sectors within the State remit, including waste management. Adding a municipal Program. Large scale funding was secured from the state charge to a pre-existing taxation system should require budget, IFIs and the private sector for the re-development only limited additional administrative capacity, especially of the entire waste sector in the city. This included the con- if it is already linked to an appropriate property or popu- struction of a new sanitary landfill, a materials recovery lation register. facility and a waste-to-energy facility in addition to policy If fees are collected by the waste management operator, and regulatory reforms. To drive this ambitious agenda, possibly a private company, then different administrative the Government established a new joint stock Solid Waste mechanisms and structures will be needed. In this case, Management Company (SWMC) to own and manage assets the local authority must provide oversight and monitoring related to waste management. Over the following decade, of the fee collection service to ensure that the operator is the company and its personnel received significant long- performing in accordance with agreed contractual terms, term capacity building, training, study tours and knowl- whilst the operator itself must have the mechanisms and edge exchange as well as on-going advisory assistance personnel needed to collect fees from households. from industry experts. By 2018, when the construction of all new facilities was completed, the SWMC had evolved A different approach again is needed if fees are to be into a professional operator with excellent capacities to charged and collected by a third-party, such as a water plan and operate its assets and manage the waste services or electricity utility. Key factors to be considered here are comprehensively. the need to (i) effectively relate the municipal housing and population register to the utility client register and The critical functions within each role are discussed fur- to (ii) ‘ring-fence’ the fees collected and transfer them to ther in subsequent Chapters. Artwork designed to collect plastic bottles at the seaside in Portsmouth, Hampshire, United Kingdom. Photo: © Gary Hider | Dreamstime.com 3 33 Policy, planning and legal frameworks 34 3 Policy planning and legal frameworks 3.1 Recognizing the need for change The present chapter focuses on policy and legal aspects and considers: Recognizing the need for action and mobilizing the polit- ical support for change locally and nationally is the first ❚ The central level responsibility for creating a policy step towards improving the performance of the sector. and legal framework which enables local authorities to Giving priority to improving municipal waste management deliver on their waste management mandate; and services should however go beyond political declarations ❚ The local level responsibility for aligning their planning and be supported by giving the competent authorities at each tier of government the authority and resources and regulatory functions in a way which enables them to needed to do it. achieve the national objectives. The process of moving from a current situation of mini- 3.2 Waste management strategies mal waste services to a future one of sustainable resource management can be approached in terms of three build- and plans ing blocks32: 3.2.1 Type of policy documents ❚ Establish waste collection services to protect public health Waste management policies, strategies and plans are needed to provide a clear view of the development tra- ❚ Improve waste treatment and disposal services to pro- jectory of the sector, set up the objectives and ideology vide environmental protection for a desirable waste management system, and define the necessary implementation measures and coordination ❚ Implement systems and incentives to enable the tran- requirements. Policy documents are not legally binding sition to sustainable resource management in a finan- and enforceable so the adoption of specific legal require- cially/fiscally sustainable manner ments is necessary for policy implementation. Legislation Organizing basic waste management services creates a can also establish the overall planning framework. Waste foundation upon which more advanced waste manage- management plans or strategies are typically prepared ment system can be built, based on the longer-term aims either at the national level or at the regional/state level, of resource use efficiency. As such, policy objectives must where combined regional plans cover the national ter- be measured and be realistic, guided by a complete and ritory. They can be prepared either as part of an overall dispassionate understanding of the current context and environmental strategy or as separate documents. The focussed on clearly defined problems and achievable most common approach is to adopt a national waste man- outcomes. agement strategy together with a separate action plan for implementing it, or for the two to be combined into a As policy objectives develop progressively over time in national waste management plan. step with gradual improvements in waste management, they guide the planning process across central and local Depending on specific needs, national waste management authorities. Central governments have the overall respon- strategies/plans can take the form of a single document or sibility for strategic planning of waste management to be a combination of several documents setting out sepa- meet policy objectives. Developing sub-national plans is rate plans for the management of specific waste streams. an essential function of local authorities. A planning pro- The scope of the strategy could be limited to municipal cess is needed to align the two. waste or might cover several waste streams, including hazardous waste, industrial waste, construction and dem- Legislation defines the legal and policy frameworks which olition waste, agriculture waste and sewage sludges. govern the sector, allocate and define institutional respon- sibilities, and assign and empower regulatory oversight. It should be recognized that although necessary, the adop- Organizing basic waste management tion of legislation, regulations, waste management strat- services creates a foundation upon which egies and plans is not immediately reflected in tangible improvements to municipal waste services. Progress is more advanced waste management achieved if the legal requirements and policy measures system can be built, based on the longer- are implemented and enforced. term aims of resource use efficiency. Based on Wilson D., Development Drivers for Waste Management, 2007 32 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 35 Waste management plans can be required at the state, detail. The environmental impact assessment of the stra- regional and/or local levels depending on the administra- tegic plan is carried out by a separate impact assessment tive division of the country and the responsibilities of the agency. The strategic plans for the provincial governments competent authorities. are first reviewed by the government investment agency (Korea Environment Corporation) and finally approved by 3.2.2 National waste management strategies the Ministry of Environment. The construction of waste and plans treatment facilities, such as incinerators and landfills, that demand broad cooperation and significant investments A national waste management strategy or plan aims to within short timescales receive national government ensure that waste management practices are responsive financial support only if the construction of such facilities to need, appropriate to context and sustainable. Their has been included in the strategic plan. The preparation purpose is to define the strategic objectives for future of a waste management strategic plan is seen as a mecha- development of the sector, create the enabling conditions nism to assess past performance and inform future objec- necessary to achieve the objectives and include guidance tives and implementation. for local and regional authorities on organizing, imple- menting and financing their responsibilities relating to 3.2.3 Sub-national strategies/plans waste management within their territories. The adoption of a waste management plan at the national Large variations exist between countries in the form, or state level should be followed by the development of scope and content of national waste management strate- waste management plans at the regional and local levels. gies and plans. The reverse sequencing is sometime observed, whereby In some countries, national strategies include a policy local authorities develop plans in the absence of national statement and provide a strategic overview of the sector. guidance which are then combined to become a national Strategies are focused on the principles and objectives plan with arguably little complementarity between them. for developing future waste management systems and key The planning requirements at regional and local levels policy actions are defined without giving guidance on spe- should not be self-serving but should be equivalent to and cific aspects such as capacity requirements or investment achieve the objectives of the national strategy or plan. and implementation costs. In such instances, detailed For that purpose, local and regional waste management planning is left to the local authorities, which have the plans are subject to consultation with the national author- flexibility to decide on practical implementation aspects ities and, in some cases, specific approval procedures are of compliance with the national objectives. The planning established for that purpose. process is intended to ensure integrity, consistency and complementarity between planning documents developed The national competent authorities are expected to pro- at different levels of government. vide guidance to regional/local authorities on the devel- opment of regional/local waste management plans and to In other countries, national waste management plans are establish procedures with them for monitoring, consulting far more detailed and prescriptive concerning aspects and coordinating the development process, the content of such as investment requirements, implementation costs such plans and their subsequent implementation. and the measures assigned to local authorities. Such plans might pre-define the boundaries and type of regional The requirements and practice of developing waste man- cooperation, define the type of facilities to be built in a agement plans at the sub-national level differs between specific region or municipality, set specific requirements countries according to their size, administrative divi- for the type of collection system to be established, or allo- sions and how waste management functions are allocated cate financing for priority investment projects and so on. between the different tiers of government. For example, in the Republic of Korea, the Ministry In some countries, including Bulgaria and Estonia, munic- of Environment approves a ten-year Master Plan for ipal waste management plans or programs are prepared at Resource Circulation which guides, at the strategic level, the local level and not at the regional level. On the other the development of the waste sector. Provincial plans hand, in Ukraine and Romania, regional authorities are (drafted by provincial government research institutes) responsible for preparing regional waste management must be aligned with the national plan (drafted by a gov- plans, only after which local waste management plans may ernment-funded research institute) and include further be developed at the municipal level. Similarly, in Belarus, 36 3 Policy planning and legal frameworks waste management plans are developed at the regional ❚ Analysis of the existing situation in the field of waste and not at the municipal level. Nevertheless, the munic- management in the respective area. ipalities (raions) are responsible for developing sanitary cleaning schemes which, as they define the type of collec- ❚ Objectives and aims to be achieved. tion system, the locations of container sites and collection ❚ Analysis of the grounds on which the optimal waste frequencies, may be considered to be waste management management system was selected, with reference to the plans but with limited scope. collection, separate collection, recycling, treatment and Availability of regional and/or local waste management disposal infrastructure and the operational practices to plans could be a condition for the allocation of national be established. financing. For example, Morocco has adopted a strict approach, initially making municipal solid waste plans ❚ List of the priority institutional, economic and technical and further compliance with a provincial plan a condi- measures and actions to be taken. tion on eligibility for funding from the national subsidy Some key elements and steps in developing waste man- scheme. This process was led by the Ministry of Interior agement plans are considered in more detail in the sec- through the Directorate of Water and Sanitation, which tions below. also provides technical assistance for planning and sup- port for engaging the private sector. This requirement pro- 3.2.4 Scope and content of the plan vided a strong incentive for municipalities to comply with the main policy objectives. More recent eligibility require- Waste management planning needs to identify the main ments cover inter-municipal cooperation and the inclu- policy measures and actions in terms of institutional, tech- sion of informal workers into the proposed activities. On nical, financial and communications aspects of waste man- meeting these criteria, a municipal or inter-municipal agement. The different elements and key questions to be entity could have up to 60 percent of its waste manage- addressed in the plan are presented in the following table. ment costs paid in subsidies, capped at 30 percent over a These elements should be broadly reflected in national period of 5 years. plans and partly in local plans. Regional and local waste management plans should cover The plan should propose actions, specifying responsible all activities that fall within the responsibility of the region institutions or stakeholders, implementation deadlines, or local authority as defined by the relevant national leg- and the amount and source of financing required and indi- islation, strategies and plans. At a minimum, such plans cators for measuring achieved results. should include: Belarus. Trashcans ready for shipping. Photo: Aksakalko Bridging the Gap in Solid Waste Management | Governance Requirements for Results 37 Table 2 Key issues considered in the waste management plan33 Framework issues addressed in the plan Key questions Legal and institutional ❚ Existing legal framework ❚ Are roles and responsibilities clearly defined – policy maker, ❚ Functions at each level of administration planner, regulator, service provider, financier? ❚ Allocation of responsibilities between public and private actors ❚ Should municipalities work together, e.g. on establishment of in waste management common treatment and disposal infrastructure? ❚ Role of private sector in service delivery ❚ Should private sector participation be encouraged? ❚ Regionalization and intermunicipal cooperation ❚ Is there need for a new institutional set-up? ❚ Producer responsibility ❚ What institutional capacities are needed to organize and imple- ment the plan? ❚ Role of informal sector ❚ Is there a need for new legislation to drive improvements? ❚ Data collection, reporting and information management ❚ How can regulation and control be improved? ❚ Planning and permitting ❚ Should there be stricter penalties for illegal dumping of waste? ❚ Enforcement and monitoring procedures and penalties ❚ Envisaged changes in legal requirements Technical and service delivery ❚ Waste streams to be covered ❚ What specific waste streams should be included in the strategic ❚ Type, quantity and sources of waste generated within the part of the plan? territory ❚ Is available information sufficient and reliable? ❚ Assessment of existing waste collection schemes ❚ What measures must be taken to improve waste prevention and ❚ Existing major disposal and recovery installations, the available environmentally sound re-use, recycling, recovery and disposal treatment capacities per type of waste management operation of waste? and waste stream ❚ What type of collection systems are considered to be progres- ❚ Type and quantities of waste imported or exported sive and appropriate? ❚ A forecast and evaluation of the development of waste streams ❚ How can the coverage and performance of waste collection ser- in the future vices be improved? ❚ Objectives and targets ❚ To what extent is the transport of waste for disposal acceptable? ❚ Service standards and performance ❚ What role should recycling play in the strategic planning? ❚ Technologies and environmental compliance ❚ What are the appropriate waste treatment, recovery and dis- posal technologies? ❚ Measures to improve the operation of existing collection schemes for different waste streams and of the need for new col- ❚ What environmental standards of waste disposal are appropri- lection schemes ate, what standards should be aimed-at? ❚ Non-compliant and illegal dumping ❚ How urgently do existing waste disposal sites need to be brought in compliance or closed? ❚ Historical contaminated waste disposal sites and measures for their rehabilitation ❚ What should be the location criteria for site identification and on the capacity of future disposal or major recovery installations? ❚ Assessment of the need for closure of existing waste installations ❚ What are the appropriate qualitative or quantitative objectives, ❚ Measures to combat and prevent all forms of littering and to targets and performance indicators, including on the quantity of clean up all types of litter generated waste and its treatment? ❚ Necessary additional waste installation infrastructure ❚ What are the waste streams that require particular attention and ❚ Tendering and contracting of waste management services and specific measures? treatment infrastructure ❚ Measures to develop professional competence and certification of services ❚ Measures and any special arrangements for specific waste streams requiring particular attention The presentation is generally guided by the scope of waste management plans as defined in EU Waste Framework Directive. 33 38 3 Policy planning and legal frameworks Table 2 Cont. Framework issues addressed in the plan Key questions Financing and cost recovery ❚ Current financial flows ❚ In relation to economic issues, what are the general problems at ❚ Future costs and investment demand the national and local level? ❚ Guiding principles and cost recovery objectives for achieving ❚ What are the priorities for improving the economics of waste financial sustainability management services? ❚ Taxes, service fees and tariffs used for the financing of waste ❚ Is the current level of investment restricting performance of management services services? ❚ Affordability and cross-subsidy ❚ What is the affordability threshold for the fees or taxes for waste management services paid by households? ❚ Use of economic and other instruments in tackling various waste problems ❚ Issues with the collection of fees or taxes for waste management services and how to improve the revenue collection? ❚ Measures to guarantee transparency of public costs ❚ What system of revenue collection and allocation shall apply? ❚ Responsibilities for budgeting of waste management system costs and revenues ❚ Should local tariffs paid by households fully cover the costs or should subsidies from local and/or central budgets be used in ❚ Sources of financing addition? ❚ Should households and legal entities pay the same tariffs or should cross-subsidization be permitted? ❚ Is public grant or loan financing needed for the development of waste collection, recovery and disposal infrastructure? ❚ Should additional instruments, such as EPR schemes be intro- duced for financing specific waste streams? ❚ Is there need for additional regulation of local fees or taxes for waste management services? ❚ How should efficiency be measured? Awareness and communication ❚ Public consultation and participation ❚ Is the public satisfied with services? ❚ Communications strategy ❚ What should be the key communication objectives, target groups ❚ Use of awareness campaigns and information provision directed and what communication channels should be used? at the general public or at a specific set of consumers ❚ Who should take the lead in improving public awareness? ❚ Incentives and penalties ❚ What are the expected costs for raising public awareness and how they will be financed? ❚ What incentives for rewarding good practices to use? 3.2.5 Guiding principles Guiding principles, situation analysis, the definition of The guiding principles are adopted at the national level policy objectives and option analysis are closely inter-re- and support the setting of objectives and the formulation lated aspects of the process of formulating the strategy/ of implementation measures. They also guide later deci- plan. They are discussed in this and the sections that sions and practical measures intended to assist in the follow. achievement of the objectives. The typical principles fol- lowed in the waste management sector are summarized in Box 2. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 39 Box 2 Common principles in waste management ❚ ‘Waste Hierarchy’34: Defines a preferred order of waste man- agement practice, subject to technical feasibility, afford- ability and financial sustainability constraints: prevention, (preparing for) reuse, recycling, recovery and, as the least preferred option, disposal (which includes landfilling and incineration without energy recovery). Departing from the ‘hierarchy’ may be considered for specific waste streams if justified by life-cycle analysis of the overall impacts of the generation and management of such waste35. ❚ Polluter Pays: Polluters and consumers cover the full costs to society (including external environmental costs) result- ing from their activities. Conveyor belt at recycling facility in Nairobi, Kenya. Photo: REUTERS / Alamy ❚ Affordability: Service costs should be affordable to users. Stock Photo ❚ Financial Sustainability: Financial sustainability means ❚ Self-Sufficiency36: The principle that an integrated and having a positive cumulative cash flow in every year. This adequate network of waste installations should be estab- refers to the minimum revenue needed annually to sustain lished to enable a country to move towards self-sufficiency a waste service and relates directly to service costs. The in waste recovery and disposal, subject to best available affordability and financial sustainability principles influ- technology (BAT). ence the setting of realistic targets and system design: its scale, scope, and implementation scheduling. ❚ Sustainable Development: The principle that develop- ments undertaken today should not compromise the needs ❚ Involvement of the Private Sector: The private sector can mobilise investment finance and provide the operational of future generations. Waste management systems should experience needed to implement efficient waste manage- be appropriate, implementable, and affordable to society. ment services. ❚ Integration: The principle that environmental protection ❚ Proximity: The principle that waste should be treated as must be an integral part of the development process. close to its source as possible. This principle can conflict with cost-effectiveness criteria and the economies of scale ❚ Precautions37: Where evidence of environmental risk often associated with larger, centralised, treatment or exists, appropriate precautionary action should be taken disposal facilities. even in the absence of conclusive proof of causes. 34 Based on Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives, EU Waste Framework Directive. 35 For instance, waste from international flights and airports or specific waste streams as identified locally. 36 Bases on EU Waste Framework Directive 37 Ibid In practice, different countries give more priority to some directly from general revenue. Another common practice principles over others or may have different interpreta- is to utilize user fees to cover operating expenditures and tions of some of the principles. For example, strictly fol- to finance amortization and depreciation costs from other lowing the polluter pays principle in low-income countries sources. Targeted support is also frequently targeted at could be challenging. Some countries chose to introduce low income or vulnerable households by exempting them user fees only for institutions and business establish- from direct charges. ments whereas service provision to households is funded 40 3 Policy planning and legal frameworks Another example is achieving self-sufficiency in the treat- The two most immediate and important ment of special waste stream categories, such as electri- cal and electronic waste (WEEE) that may be impractical issues faced by many low-income for small island countries, technically feasible or econom- countries are incomplete waste ically justified. collection service and the proliferation In many cases affordability considerations limit the scope of uncontrolled dumping. Establishing for implementing advanced, higher cost but more environ- waste collection services to protect mentally acceptable technologies which sit higher on the public health and improving waste ‘waste hierarchy’. treatment and disposal services to Among all, the ‘waste hierarchy’ is the most widely protect the environment should therefore adopted principle. The concept places environmentally be the first objectives of the waste sound waste disposal at its base, with the preferred options of waste recycling, reuse, minimisation and avoid- management strategy or plan. ance above it (see Figure 1). It is important to recognise The two most immediate and important issues faced by that, by focusing on environmental benefit and not costs many low-income countries are incomplete waste collec- or social, economic and institutional requirements, it rep- tion service and the proliferation of uncontrolled dump- resents a simplified framework. ing. Establishing waste collection services to protect public health and improving waste treatment and disposal Figure 1 ‘Waste Hierarchy’ services to protect the environment should therefore be the first objectives of the waste management strategy or plan. Policy aspirations supporting a transition to sus- tainable resource management should also be set out, but with the caveat that, in practical terms, climbing further up the ‘hierarchy’ can only happen once effective collec- tion and disposal systems have been put in place. The ‘hierarchy’ is not a rigid structure but a guiding frame- work that should be used flexibly. Different treatment solutions coexist within the treatment mixes of different countries; whereas the ‘hierarchy’ provides the concep- tual direction for the development of the sector and guides longer term planning. It should also be appreciated that when treatment capacity of any type is introduced, it comes with a lock-in effect for the life of that capacity. For exam- Source: Global Management Outlook, ISWA, UNEP, 2015 ple, countries may find themselves practically constrained from achieving more recycling if they have established large energy recovery facilities which compete for the same The experience of countries that have moved up the ‘hier- waste material; i.e. high-calorific value plastics or carboard archy’ demonstrates that progress has not been achieved are also the focus of recycling efforts. The sizing of facilities in a single step but has required concentrated effort and is therefore an important aspect of planning as it affects the resources over several decades (see Box 3). Moving up overall treatment mix in the medium term. the ‘waste hierarchy’ requires a mix of policies that take account of institutional, social, economic and financial 3.2.5.1 Linkages with GHG emissions aspects as well as technical and environmental ones. It Policy actions in many countries are increasingly impacted brings environmental benefits but increases the financial by linkages between waste management and GHG emis- costs for the sector. For instance, the net cost of recycling, sions. When defining measures and developing action including collection, sorting and treatment operations, is plans to meet the objectives of the Paris Agreement, coun- typically significantly greater than controlled disposal or tries and cities must identify contributing sources and sanitary landfill. designate sectors to achieve emissions reductions. While Bridging the Gap in Solid Waste Management | Governance Requirements for Results 41 Box 3 The evolution of the ‘waste hierarchy’ concept The ‘waste hierarchy’ as a conceptual framework was first a circular economy, boost global competitiveness, foster sus- applied in the EU. Since 1975, EU waste management legisla- tainable economic growth and generate new jobs. The Plan tion has focused on reducing and avoiding risks to the envi- established a concrete and ambitious program of action, with ronment and human health. Implementation of the ‘waste measures covering the entire life-cycle of products, from pro- hierarchy’ and the objective of increasing waste recycling duction and consumption to waste management and the mar- became a priority at a much later stage. Recycling targets for ket for secondary raw materials. The new Circular Economy packaging waste were introduced in 1994. General recycling Action Plan39 adopted in 2020 announced initiatives along targets for municipal waste were not introduced until 2008. the entire life cycle of products, targeting their design, pro- In 2015, the European Commission went further by adopting moting circular economy processes, fostering sustainable an ambitious Circular Economy Action Plan38, which includes consumption, and aiming to ensure that resources used are measures which seek to stimulate Europe’s transition towards kept in the economy for as long as possible 38 Closing the loop - An EU action plan for the Circular Economy, COM (2015) 614 final 39 A new Circular Economy Action Plan - For a cleaner and more competitive Europe COM (2020) 98 final energy generation, transportation and industry remain countries are as high, or higher, than middle- and high-in- the largest GHG emitting sectors, waste management is come countries41. Consequently, average contributions of increasingly seen as an important contributor with emis- municipal waste in GHG inventories of cities in low-income sions abatement potential. GHG emissions reductions countries are much higher than those in middle- and high-in- from waste contribute to the global public good in addi- come countries. In some low-income countries, municipal tion to significant local benefits related to community solid waste represents as much as 30 percent of a city’s GHG health, environment, flood protection and local economic. inventory as in the case of Dar el Salam, Tanzania42. C40 city GHG emissions reductions from municipal waste is also GHG inventories confirm these relatively high contributions considered to require relatively easier adjustments com- from the waste sector, e.g. Accra, Ghana (2015) 44 percent; pared to structural changes to transition a country econ- Lagos, Nigeria (2015) 25 percent; Nairobi, Kenya (2016) 33 omy to, for example, renewable energy sources or public percent; Rio de Janeiro, Brazil (2017) 20 percent; Kolkata, transportation modes. India (2017) 35 percent.43 Globally, an estimated 1.6 billion tonnes of CO2-equivalent This means that low-income cities may have a signifi- of GHG emissions were generated from solid waste in 2016, cant potential to access climate finance to reduce emis- some 5 percent of global emissions. This reflects down- sions generated directly by the waste sector. In absolute stream effects mostly from open dumping and unmanaged and global terms, abated GHG emissions may be small, landfill gas. In a business-as-usual scenario, solid waste however, given the projected increase in generated quan- directly related emissions are anticipated to increase to tities in these countries, establishing high-performing 2.6 billion tonnes of CO2- equivalent by 2050.40 waste management systems with landfill gas capture and management, and limiting waste dumping will be core to Global averages of direct emissions differ significantly ‘future-proofing’ the sector. between low- and middle-income countries.  Low-income countries have higher relative proportions of organic waste, Where basic waste collection and disposal with landfill high quantities of uncollected and dumped waste, and management are in place and the sector starts to tran- low energy intensity. Food waste volumes in low-income sition upwards of the ‘waste hierarchy’ towards greater 40 What a Waste 2.0, World Bank, 2018 41 Food Waste Index Report, UNEP 2021 42 Sugar, L., Kennedy C. and Hoornweg D., Synergies between climate change adaptation and mitigation in development: Case studies of Amman, Jakarta, and Dar es Salaam. International Journal of Climate Change Strategies and Management, Vol. 5 No. 1, 2013 43 C40, BASIC Emissions (stationary energy, transport and waste) as defined in the Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC). See https://www.c40knowledgehub.org/s/article/C40-cities-greenhouse-gas-emissions-interactive-dashboard?language=en_US Accessed 16-3-2021 42 3 Policy planning and legal frameworks recycling and waste prevention, waste management offers contaminated are important factors that will determine the a great potential for emission abatement. Recycling offers extent to which GHG abatement potential could be met. benefits in terms of resource efficiency and associated Good quality separate collection systems to capture mate- GHG emissions. When materials are recycled, GHG emis- rials and to reintroduce them into the economy should sions are reduced from avoiding new virgin material pro- be promoted as a matter of policy over lower treatment duction which is associated with higher energy intensity options within the ‘hierarchy’, but minimum conditions and GHG emissions. Figure 2 shows the energy intensity of discussed above must be in place and the system should virgin and recycled plastics production. be financially affordable if it is to be sustained. Countries at this stage of development, typically middle-income countries, may have significant potential to access climate Figure 2 Relative energy intensity of virgin and finance for activities such as separate collection and recy- recycled plastics production44 cling in addition to waste prevention and minimization. 100 3.2.5.2 Linkages with marine plastic litter 80 National and city planning has been impacted lately by Energy use (MJ/kg) international calls and local objectives to curb plastic ocean 60 pollution, the most significant source of which is municipal 40 solid waste. It is estimated that over 80 percent of ocean plastics comes from unmanaged or poorly managed munici- 20 pal solid waste on land.49 Three-quarters of that quantity is 0 found to come from uncollected waste with the remaining Virgin plastic Recycled plastic quarter leaking from within the waste management system due to poor controls and secondary pollution, such as unau- n Production n Local transport n Export transport thorized dumping of collected waste.50 Given that a third of the municipal waste generated globally is currently dumped Note: Data is for plastic resins only. Sourece: Wong C. (2009), “A Study of Plastic Recvycling Supply Chain 2010”, and that waste generation rates continue to increase, a busi- http://www.ciltuk.org.uk/portals/0/documents/pd/seedcornwong.pdf (accessed on ness-as-usual scenario would mean an exponential increase 28 March 2018). of ocean pollution with devastating effects on the ecosys- tem, the marine environment and our food chain. For example, recycling 1 tonne of plastics is estimated to reduce emissions by 1.1-3.0 tonnes of CO2 compared to Internationally, a consensus has emerged that a com- producing the same tonne of plastics from virgin fossil bination of policies and system investments are needed feedstock.45,46 Steel recycling uses only 10-15 percent of to address the ocean plastic debris challenge. That will the energy required in the production of primary steel.47 include: (i) improved waste management systems to Plastics, together with steel, cement and aluminium, if reduce and eliminate leakages of plastic waste into the recycled, could help reduce overall GHG emissions by 40 percent in 2050.48 This very significant emission reduction The extraordinary amounts of waste that potential would be possible if the materials are captured and reintroduced in the economy. To a very large extent leak into the environment in real-time, the success of GHG avoidance depends on how well orga- especially in low-income countries, calls nized the waste management systems are. for immediate attention to prioritize Good collection systems and separation at source to these hot spots and minimize the ensure high-quality recycling materials that are minimally leakage. 44 Environmental Policy Paper No. 12: Improving Plastic Management: Trends, Policy Responses and the Role of International Cooperation and Trade, OECD, 2018 45 Completing the picture how the circular economy tackles climate change, Ellen MacArthur Foundation, 2019 46 The new plastics economy: rethinking the future of plastics, Ellen MacArthur Foundation, 2016 47 Ibid 48 Ibid 49 Stemming the Tide: land-based strategies for a plastic free ocean, Ocean Conservancy and McKinsey Center for Business and Environment 50 Ibid Bridging the Gap in Solid Waste Management | Governance Requirements for Results 43 environment; (ii) upstream solutions to reduce unneces- consider postponing certain decisions until the necessary sary use of plastics and promote the use of more recycled information is available and, in the meantime, consider and recyclable materials; and (iii) clean-up operations introducing shorter periods between reviews and updates of already accumulated debris. Clean-up operations of of the plan. already accumulated waste could be important in spe- Setting objectives is usually based on problem analysis. cific locations (e.g., river deltas, beaches) and are relevant The purpose of situation analysis is to provide information for certain environments. However, large-scale clean-ups to readers on the main characteristics of the waste manage- make little sense if the leakage of new plastic debris con- ment system and, most importantly, to identify the prob- tinues. Emphasis is therefore required on a combination lems and challenges faced by the sector, and the aspects of ‘upstream’ (pre-consumer, such as material redesign, which require particular attention and improvement. plastic reduction, and substitution) and ‘downstream’ solutions (postconsumer, such as recycling and disposal). An analysis of political and institutional risks and the risks related to vested interests that could hamper adap- It should be noted that the extraordinary amounts of waste tation and implementation of the strategy or plan is also that leak into the environment in real-time, especially in relevant. low-income countries, calls for immediate attention to pri- oritize these hot spots and minimize the leakage. Given The periodic review of the management strategy/plan must that plastics production and use is projected to increase assess progress made towards achieving the initial objec- significantly in coming decades, some proportion of this tives, identify the key issues and obstacles that have been material will inevitably make its way into the environment faced and draw on this experience to inform and guide the unless waste management systems improve.51 To that end, forthcoming objectives setting process. The review should international organizations and other financiers have be critical and correctly identify reasons for the failed or mobilized resources to assist countries in their efforts to delayed implementation of planned activities or for the curb marine plastic litter. As these efforts are central to non-achievement of planned objectives or investment lev- municipal waste systems, countries could access inter- els. It is commonly observed that when reviewing previ- national plastic pollution reduction finance that support ous activities, the authorities tend to be more focused on both ‘downstream’ and ‘upstream’ solutions. Related met- actual achievements rather than being inquisitive about, rics could be included in municipal waste management and-critical, of the failures. Another common deficiency of plans as discussed in the next section below. the situation analysis is to identify problems without care- fully considering and analysing their causes. 3.2.6 Situation analysis For example, in India, national solid waste management A thorough understanding of all aspects of the existing rules require cities to formulate their city level integrated waste management situation both locally and nationally solid waste management plans, covering various categories is essential for setting realistic objectives and for reliable of waste, in line with a city’s long-term waste infrastructure planning. and service delivery needs. These city level plans serve to establish the baseline of cities’ waste generation, waste A common problem faced in the planning process is the characteristics and signpost waste growth profiles consider- lack of data or that data are incomplete or unreliable. It ing local socio-economic and demographic parameters. The is not uncommon to find that the competent authorities plans enable city governments to establish the infrastruc- are strictly focused on using officially published data and ture and service delivery needs, assess the financing needs are reluctant to address inconsistencies and deficiencies and set the user charge, as part of local by-laws, for var- in such data. Recognizing and understanding the problem ious categories of waste generators. In addition, national is important. Improving data quality and its completeness rules require State Governments to develop a state level must be considered when planning future activities and waste management strategy as well as focused plans for addressed in the respective action plans. various streams of waste, such as plastic waste, construc- Estimates and assumptions can be used for the purpose tion and demolition waste, domestic hazardous and e-waste of planning when justified and reasonable. An absence and domestic bio-medical waste that serve as the basis for of data, though, increases uncertainty and reduces the compliance monitoring against the National Environmental reliability of planning. In such cases, authorities should Protection Act. In Kerala, the provincial Government has Improving Plastics Management: Trends, policy responses, and the role of international co-operation and trade, Policy Perspectives, OECD, 2018 51 44 3 Policy planning and legal frameworks developed and is in the process of adopting an integrated organization and implementation of the waste manage- solid waste management strategy along with a plastic waste ment system. When setting policy objectives and tar- management action plan aimed at reducing mismanaged gets, waste management authorities should distinguish plastics. The background assessment included a scenar- between what is desirable and what is realistically achiev- io-based option analysis as well as material flow analysis. able. Objectives and targets should be52: ❚ Specific: defined as precisely as possible 3.2.7 Definition of policy objectives ❚ Measurable: possible to be evaluated on fulfilment Countries and local authorities should define their objec- tives in terms of what they realistically believe can be ❚ Achievable: possible to be achieved achieved over the planning period after taking account of the existing situation and of any specific constraints. ❚ Timely: linked to a deadline for achievement Objectives may be relatively simple, such as organizing Indicative objectives typically include: and extending waste collection services, providing safe waste disposal services or improving cost efficiency, or ❚ To extend the scope and improve the quality of waste they may extend to encouraging waste prevention, setting collection services. recycling targets or reducing greenhouse gas emissions. ❚ To reduce the risk to public health and safety and to the Objectives develop progressively over time in step environment from abandoned and/or unlicensed waste with gradual improvements in waste management. disposal sites. International practice confirms that transitioning the sec- tor towards resource efficiency and the concept of the cir- ❚ To optimise opportunities for waste prevention and cular economy are largely not market driven but depend minimization. on regulation. Waste management companies operate ❚ To increase the quantities of waste that are re-used, in markets under contract with the objective of fulfilling their contractual obligations and making a profit on their recycled, and recovered where it is economically and investments. Regulation of the waste sector on the less financially viable to do so. preferred management options of landfill and incineration ❚ To develop capacities for waste treatment, recovery and therefore create the conditions whereby alternative treat- disposal that are consistent with the most recent tech- ment options that sit higher on the ‘hierarchy’ become nical standards. financially viable and hence attractive opportunities for private sector waste companies to invest and operate in. ❚ To strengthen institutions responsible for waste man- This aspect is often misunderstood, and there could be agement at the national, regional and local levels. a desire to emulate approaches that are seen to work in ❚ To provide sufficient and reliable data on waste genera- high-income countries with the expectation that they will tion, treatment and disposal. work equally well elsewhere. This is commonly reflected in a tendency to set objectives that are overly ambitious, ❚ To increase investments in the sector and expand appli- unrealistic and unachievable. For example, a local author- cation of the ‘extended producer responsibility’ and ity is unlikely to attract private sector investment in a ‘polluter pays’ principles. pay-as-you-throw collection scheme if a large percentage of its residents do not pay for waste services. Similarly, ❚ To increase public awareness of, and involvement in, high recycling rates cannot be achieved in the absence of efforts to address the core waste management issues large-scale separate collection systems and community facing the country. participation. Waste management plans should also define quantitative Setting realistic objectives is a fundamental component of targets to be met by specific dates, the timing of which the national and local authority planning process as it gov- reflect, as far as possible, the agreed guiding principles, erns downstream decisions and is crucial for the proper strategic objectives, and constraints. Preparing a Waste Management Plan. A methodological guidance note. European Commission, Directorate-General Environment, 2012 52 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 45 Box 4 Indicators used in municipal plans in Japan Category Objective to be measured Indicator Unit Wate generation Waste generation pero person-day kg/person-day Establishing Recycling date Recycling rate from waste % (ton/ton) recycling-based society Thermal recycle Energy recovered from waste MJ/ton Final disposal Proportion of waste sent to to landfill site % (ton/ton) Prevention of global GHGs emission GHGs emission per person a day associated with waste kg/pwerson-day warming disposal Residents’ satisfaction for Degree of satisfaction of residents – Public service waste treatment Annual waste treatment cost per person JPN yen/person-year Cost of recycling JPN yen/ton Economy Cost-effectiveness Cost of thremal recycling JPN yen/MJ Cost associated with wsate reduction service JPN yen/ton Source: Municipal Solid Waste Management: A Roadmap for Policy Makers, World Bank 2018 Targets are usually determined for waste collection cov- ❚ The comparison of centralised and decentralised sys- erage, separate collection coverage, separately collected tems for the treatment of separately collected biowastes materials (cardboard, plastics, glass, and metals), specific in a regional waste management system: one large cen- treatment and disposal, environmental performance and trally located plant versus two or more smaller plants efficiency (see Box 4). Specific targets for individual waste located closer to the main collection zones. streams, including packaging waste, WEEE, batteries and accumulators, end of life vehicles, and waste oils might ❚ Comparison of technological alternatives for the treat- also be defined. ment of residual mixed waste collected after the sepa- ration of recyclables: mechanical-biological treatment 3.2.8 Options analysis and cost estimates with composting of the biological fraction versus ther- mal treatment in a waste-to-energy facility. Options analysis is commonly used in the development of investment projects and is usually undertaken at the fea- Second, the analysis of possible sites and more specific sibility analysis stage. Ideally, though, option analysis technical alternatives for individual projects are gener- should be carried out at two levels: options analysis as ally compared on the basis of costs, technical complexity, part of national or regional waste management planning social considerations and other criteria. Example for such focused on strategic decision making regarding future analyses are: waste management systems; followed by options analysis ❚ Comparison of alternatives for transporting waste to a at the project level. central treatment or disposal facility from distant col- First, strategic alternatives are compared on an eco- lection zones: transport with or without a waste trans- nomic basis. For example, comparing alternative mixes fer station for the reloading of waste from small refuse of national waste treatment measures, different methods collection vehicles to vehicles with larger payload and/ of waste management or varying degrees of regionalisa- or compaction. tion of waste treatment and disposal facilities. Sometimes other criteria related to technical, managerial and logisti- ❚ Comparison between technologies for a mechanical and cal aspects are incorporated into the analysis. Examples of biological treatment plant or technologies for anaerobic strategic alternatives are: digestions. 46 3 Policy planning and legal frameworks Quite often the option analysis is missing or not suffi- Ideally, option analysis should be ciently elaborated when developing national waste man- agement plans. This could result in unrealistic objectives, carried out at two levels: options uncertain environmental benefits or lower economically analysis as part of national or regional efficient solutions. waste management planning focused The purpose of the option analysis is to formulate and com- on strategic decision making regarding pare different technical, financial and institutional alter- future waste management systems; natives to deliver defined objectives and determine the followed by options analysis at the optimal future waste management system. It is also used project level. to assess whether objectives are realistic and can feasibly be achieved within specific deadlines over the planning identification and comparison of technical alternatives period. Having clarity on the planned national or regional taking waste collection, separate collection, treatment, set up is highly relevant for local authorities and aids the recovery and disposal into account. process of waste management planning at their level. It informs them of the intended sector landscape in terms of The options for the future waste management system infrastructure, facilities and their intended capacities, and should be prepared using projections and mass balances intended level of regionalisation on service delivery. of the quantities of municipal waste collected, sepa- rately collected, sorted, treated, recycled, recovered and Typical issues addressed by option analysis as part of disposed of to landfill. The analysis of waste flows and national or regional waste management planning include: the projections form the basis for determining capacity ❚ How rapidly to extend waste collection services to the requirements and for sizing the different collection and entire population, how much it will cost, how it will be treatment alternatives. financed. Detailed investment and operating cost estimates are developed for each option on annual basis. Investment ❚ Over what period will existing disposal sites either be costs should include not only the initial investments but brought into compliance or closed, and what intermedi- also future investments in the replacement of equipment, ate measures will be implemented until technical com- for the construction of new landfill cells, landfill cell clo- pliance is achieved. sure and cultivation, and aftercare costs arising over the ❚ How rapidly separate waste collection be organized, entire plan implementation period. how many residents must be provided with separate Based on the investment and operating costs calculated collection services, what quantity or what percentage of for each component and for the entire system, unit costs generated waste must be re-used or recycled. can be calculated, for example, per tonne of waste gener- ated, separately collected, sorted and treated and per cap- ❚ Whether garden and kitchen waste should be collected ita and per household served. separately and what composting and anaerobic diges- tion capacities will be needed. The waste management options are then compared according to their relative costs and affordability to users. ❚ What should be the role of waste incineration and, more Comparisons made with present cost levels is appropriate generally, what should be the overall mix of treatment when analysing alternatives. Box 5 presents the options technologies within the country or region. analysis done in the process of developing Azerbaijan’s Various considerations are in play when deciding on these National Waste Strategy. issues, including the existing context and baseline, how At the project level, the criteria for selecting the opti- much the respective measure will cost, how they will be mal alternative for the future waste management system financed and over what period, and who will be responsi- should include economic, environmental, technical and ble for implementation. social considerations. The following indicative criteria The scope of the option analysis could differ depend- might be used for the evaluation and ranking: ing on the type of plan that is developed and the specific ❚ Track record of technology considered. issues faced by the country or region. In any case, select- ing the optimal waste management option requires the ❚ Technical complexity vs. available capacities. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 47 Box 5 Azerbaijan National Waste Management Strategy The Azerbaijan National Waste Management Strategy was approved via Presidential Decree in 2018. The Strategy aims to (i) improve core collection and disposal processes including the development of regional landfills and transfer stations that will provide disposal services for var- ious groupings of rayons (regions) throughout Azerbaijan; and (ii) ensure the efficient use of available resources in set- ting up the investments and development schemes that would improve solid waste collection, recovery and disposal in all of the country’s rural and urban areas. The Baku Waste Management Strategy is a separate document developed prior to the National Strategy and part of the over- Artwork made by students in Baku, Azerbaijan, using paper, plastic, rubber all country planning effort. products, and various household waste. Photo: © Adil Celebiyev | Dreamstime.com. The development of the National Strategy followed a thorough and comprehensive process, comprising data collection, diag- nostic studies, options analysis and site investigations. This developed for the 3 Levels of technical arrangements and 3 process is summarized below: Levels of enabling framework arrangements. They were com- pared on the basis of cost (capital investment cost, recurrent Based on demographic data, waste generation and composi- cost affordability, market demand for by-products) and sus- tion, topography and distances, the draft Strategy proposed tainability (environment quality protection, public health pro- to establish eight waste zones in Azerbaijan, each of about tection, natural resource conservation, skill capacity need). 300 tonnes/day, considered the minimum quantity needed to The scenarios, when developed to reach Level 3, would enable achieve economies-of-scale in a sanitary landfill facility. greater market revenues from recyclables and resource recov- Technical options related to collection and transfer, recycling ery, highest level of private sector investment, and strongest and resource recovery and landfill types were developed tak- regulatory protection against adverse environmental and ing into consideration economies of scale based on local unit health impacts. rates. The scenario that was chosen by Azerbaijan, following inten- As a next step, the enabling framework was analyzed against sive consultations, presented the most cost-effective option, its ability to support and enable the delivery of identified balancing both costs and sustainability within the context of technical activities. Options were developed with regards to the country’s level of income and stage of infrastructure devel- legal requirements, institutional changes, financial systems, opment. It aims to ensure: cost recovery mechanisms, market incentives and private sec- ❚ On the technical side: Long term integrated waste manage- tor incentives. ment system based on a regional approach with 8 waste The technical and enabling environment arrangements were sheds consisting of 8 regional sanitary landfills and 38 then overlaid and broken down into phases, each phase with a transfer stations; upgraded and properly managed collec- duration of six years. tion system; and closure/rehabilitation of existing dumps. Three levels of activities were formulated, each one with a ❚ Institutional arranangements: Establishment of institu- different degree of effort, complexity, cost and achievement. tional structure to ensure institutional support and opera- Level 1 arrangements provided a minimum amount of upgrad- tional capacity; strengthened sector monitoring and control; ing activity. Level 2 arrangements provided a medium amount intermunicipal cooperation for collection/transportation. of upgrading activity. Finally, Level 3 arrangements provided ❚ Financial provisions: Cost recovery of operations with a maximum amount of upgrading activity. increased tariffs and improved payment collection and Finally, scenarios were developed comprised of various Level development of national financial and waste accounting 1, 2, or 3 arrangements for each topic. Six scenarios were systems. 48 3 Policy planning and legal frameworks ❚ Reduction of quantities landfilled or bio-degradable and reduce considerably the potential resource risks faced waste landfilled. by the future operation of the facility. ❚ Minimum space required and required distance from Proposals to divide the country or territories into service population centres. zones and for the associated treatment and disposal facili- ties should be set out and justified in the respective waste ❚ Recycling recovery rate achieved and sensitivity to management plans on considerations of, for example, effi- increased recycling/recovery requirements in the future. ciency, equity and access. ❚ By-products, markets for products of treatment plants, For example, in Romania the National Waste Management dependency on markets. Plan provides an estimate of the necessary treatment, recov- ery and disposal capacities whereas the regional waste ❚ Energy utilization/recovery and energy demand. management plans define the precise type, capacity and ❚ Wastewater discharge, emissions. service zones (local authorities) of the facilities. Similarly, in Ukraine each administrative region is obliged to prepare ❚ Sensitivity to waste quantity changes. a waste management plan. The regional waste management plan must divide the territory into several waste manage- ❚ Implementation timeline versus that of the alternative. ment service zones (clusters) following the completion of an The options analysis frequently reveals that the option options analysis comparing technical alternatives. that best meets the environmental and resource effi- In some countries free competition exists on the waste ciency objectives of the strategy has high implementation disposal and treatment market and local authorities or costs that would be unaffordable to society and invest- service providers are free to choose which between com- ment requirements which exceed significantly the finan- peting facilities for treating and disposing of their waste. cial capacity of the local authority. If it is concluded that Waste management plans in this case are more focused on implementation of the option is infeasible owing to finan- ensuring that the necessary treatment and disposal capac- cial or other social constraints, then either the period set ity is developed at the national level without considering for achieving the specific objectives might be extended or the capacities of individual installations. the targets might need to be reduced. The waste management plans developed at the differ- In principle, the development of the plan should be ent administrative levels must take into consideration thought of as an iterative process based on feedback the significant economies of scale associated with larger between objectives, technical options, implementation landfills and some treatment plants (see Figure 3). Such costs and organizational models. economies of scale can have a major impact on total waste management costs per tonne of waste collected and 3.2.9 How to deal with minimum required on the cost per household as reflected in the tariffs. As treatment and disposal capacities the affordability of waste services is critical to the deci- sion-making process, optimising landfill size and waste Some countries use the national or regional waste man- treatment capacity to maximise economies of scale and agement plans to determine waste treatment and disposal minimise costs is a key objective of the options analysis. facilities and their capture area. In this case waste gener- ated within the defined service area is delivered to a spe- The identification, selection and approval of regional land- cific facility defined in the respective plan. Such approaches fill sites and other waste treatment facilities is a crucial presuppose that the country or region is sub-divided into element of the implementation process and should be service zones and that local authorities will cooperate in given the highest priority from the beginning of the plan- establishing and using common treatment and disposal ning period. The planning process must address all appli- infrastructure created in their respective zone. This type of cable legal and planning requirements concerning the centralized approach is typically used when the develop- proximity of a landfill to urban zones, water flows and pro- ment of waste treatment and disposal infrastructure relies tected natural areas. Other limiting factors on site location on public financing. Defining service zones in this way can can include specific provisions on land use, geological and guarantee the supply of waste quantities to the facility, be hydrogeological conditions, access to the site and others. a tool and driver in support intermunicipal cooperation, Usual practice in the site selection process is to identify Bridging the Gap in Solid Waste Management | Governance Requirements for Results 49 Figure 3 Cost curves for landfill sites with different capacity - variation in unit costs53 40 35 Landfill unit costs, EUR/tonne 30 25 n Unit oprating cost 20 n Unit investment costs 15 10 5 0 300,000 200,000 150,000 75,000 50,000 30,000 Landfill capacity, tonnes per year Source: Own estimates The unit landfill costs are calculated as Average Incremental Costs (AIC) per tonne of waste deposited under the same operating conditions: lifetime of 53 the landfill of 20 years, landfill comprising of 4 landfill cells each in operation for five years, discount factor used 5 percent. Typical unit costs for civil works, materials, machinery, equipment and consumables used (Ukraine). and assess several potential sites against a set of pre- and use of organic waste separately from other types of liminary criteria. If feasible, the option of extending an solid waste. The planning of separate collection and recy- existing landfill in combination with site rehabilitation cling systems should be realistic and rigorously examine measures is almost always considered to be a priority. A the technical and financial viability of these measures, final site selection decision is usually made according to together with their overall environmental, public health, and following the completion of an Environmental Impact economic and social impacts. The potential for using alter- Assessment (EIA). native measures for treating residual waste should also be analysed and implemented when technically justifiable Identification of appropriate sites for waste treatment and feasible within existing financial constraints. and disposal facilities could be a significant challenge in densely populated metropolitan areas. The neighbour- ing local authorities are usually resistant to accept such 3.2.10 Financing strategy large-scale facilities on their territory and compensatory The waste management plan should indicate the scale of measures could be needed to create a financial incen- the investments needed to implement it, how they might tive for the hosting municipality. The central government be funded and the measures needed to secure financing authorities could also facilitate an inter-municipal coop- for its annual operating cost requirements. Total annual eration and site allocation process through financial sup- expenditures relative to GDP can be a useful indicator for port policies for shared waste management facilities. gauging how realistic a proposed strategy is from a finan- These arrangements need to be made very clear before the cial perspective. municipal management master planning process begins. High level political commitment towards investment in The waste management plan should consider the scope for MSW infrastructure is needed to unlock prospective invest- applying methods and processes from higher up the ‘waste ment finance from within government and administrative hierarchy’. For example, it should evaluate measures for sources and to give support to government policy on the implementing a system of separate collection and sorting introduction of effective cost recovery mechanisms to of recyclable waste fractions and encourage the collection ensure the long-term financial sustainability of improved 50 3 Policy planning and legal frameworks municipal waste management services. the support to be provided to low-income or vulnerable households. These and others are addressed in detail in Potential domestic sources of investment finance include Chapter 4. grant finance from national or regional budgets; municipal- ity and municipal public utility waste management company National legislation i.e. the waste law typically establishes capital reserves; and investment by private sector waste the powers at national and local government administra- management firms (retained earnings, equity finance) with tion levels needed for determining payments to waste ser- potential access to loans from commercial banks. Access to vice providers and charges payable by waste service users. grant finance from the state budget for the design and con- National government commonly has powers to define and struction of waste treatment infrastructure may be neces- approve the methodology to be used for calculating (i) the sary to initiate the implementation of the strategy as well as unit tariff relating to the cost per tonne of waste service pro- to help keep tariffs within affordability limits. vision, and (ii) the fees to be applied to waste service users. IFI funding via long-term loans is a potential source of Local government has powers (i) to calculate and approve co-finance for implementing the strategy. International the unit tariff payable to waste service providers, and (ii) to waste management companies may be interested in determine the waste service fees payable by users, both cal- financing or co-financing investments in waste manage- culated according to the approved methodologies. ment equipment and facilities but will expect to make The waste law will also usually define how waste service commercial returns commensurate with the risk associ- users will be charged (for example, per household, per per- ated with the investment. Guarantees and counter-guar- son, per m2 of floor area, per kg of waste), how revenues antees on investments are typically required especially in may be collected (for example, via a municipal tax, via higher risk environments. municipality direct billing, via third-party billing by a pub- Grants, long-term loans or both might also be available lic utility, via a housing association), and how service fee from bilateral or multi-lateral sources to support strat- revenues may be accumulated in local government budgets. egy implementation. Governments should engage with the international community to identify areas of mutual inter- 3.2.12 Institutional structures and est, potential cooperation and assistance. organizational models to implement the These aspects are considered in more detail in Chapter 4. strategy The plan should define the overall institutional structures 3.2.11 Paying for services and affordability and administrative arrangements through which the waste The process of defining and preparing an optimal waste management system will be planned, constructed, operated management plan depends on key policy decisions being and regulated. It should also describe the responsibilities taken on a range of key issues at the national, regional and of the various institutions and organizations associated municipal levels, transposing those decisions into relevant with implementing the measures envisaged by the plan, laws, regulations and ordinances, and on strong political and identify actions planned for strengthening the adminis- commitments towards implementing the legal framework trative capacities of various stakeholders. The administra- at all levels. From the financing perspective the immediate tive costs estimated for implementing the strategy and their focus is often on how the initial investment costs of the possible sources of funding should also be indicated. improved services should be financed, but equally import- ant is the question of how the recurrent annual revenue Close cooperation, coordination of effort and clear lines required to sustain the services is to be funded. of communication between the competent authorities and local administrations are needed to ensure that decisions A wide range of issues must be addressed and decided taken to invest in collection and treatment infrastructure before this question can be answered effectively, many for improving municipal waste management services are of which are inter-related. They include the role (if any) appropriate to local conditions and compatible with the proposed for involving the private sector in providing and aims and objectives of the waste management strategy. financing the services; the type of waste collection service to be used (which can directly affect charging policy); cost Organizational models for waste management services are recovery and charging policy; and determining policy on considered in Chapter 5. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 51 3.2.13 Communication and public awareness should have a right to participate in the preparation of waste management plans, through public meetings, com- Waste management plans developed at the national, mittee involvement, commenting on draft text and simi- regional and local levels should recognise the need for lar. A starting point can often be to call a public meeting resources and responsibilities to be allocated for prepar- for conducting a structured problem analysis. Draft plans ing and implementing long-term communication strat- should be published and open for comment. This level of egies or similar measures for raising public awareness. involvement in the planning process aims to ensure that Typically, public outreach campaigns aim at: there is general acceptance of the waste policy and that ❚ Changing attitudes towards litter and especially dump- interested parties can genuinely contribute to and influ- ing. This is a necessary step to gaining public support ence the attainment of its objectives. for improving the performance of the waste sector and its transition up the ‘waste hierarchy’. It aims to reduce 3.2.15 Strategic environmental assessment social tolerance towards indiscriminate dumping and A Strategic Environmental Assessment (SEA) must be car- litter, and reinforce the resolve of regulatory bodies to ried out for plans and strategies prepared at the national or enforce regulations that forbid such behaviour. regional level. The purpose of SEA is to assess the potential impacts on the wider society and environment of proposed ❚ Improving the environmental awareness of the popula- policies and strategies, to formulate alternatives and miti- tion. Waste management, traditionally seen as having gation strategies, and to improve the decision-making pro- only localized effects, is nowadays regarded as having cess around the design of the plan. It also offers a platform significant adverse effects on global public goods – from for consultations with a broad range of national and sub-na- land and marine pollution through deteriorating air and tional stakeholders, including potentially affected commu- drinking water quality. nities, to integrate social and environmental concerns into the upstream policy-making process. ❚ Raising awareness of the need for improved municipal waste management and what it involves in terms of costs The results of the SEA and associated consultations are and the need to finance it. Public support is essential to reflected in modifications made to the policy, strategy or implement planned activities and provide continuous plan before its final adoption. The SEA process can be time financing through user fees. Recovery of costs through consuming and can go through many iterations before user charges is the most effective mechanism, so long final agreement is reached. as tariffs are affordable, are introduced progressively, For example, in India, SEAs are carried out to enable the and low-income or vulnerable households are protected identification of environmental impacts and the risks asso- from unaffordable fees. ciated with proposed sector interventions; to assess the policy, legal and institutional framework and its capac- ❚ Promoting sustainable use and consumption models. The ity to manage identified impacts; and include a set of rec- promotion of responsible consumer behaviour in sup- ommendations by which these impacts can be addressed port of initiatives for waste prevention and separation to enhance the environmental sustainability of the pro- at source. posed sector interventions continually, by also specifically focusing on regional environmental differences. A recent ❚ Managing expectations. Specific communication activities SEA conducted in the State of Kerala followed a participa- are needed to inform the public about sectoral achieve- tory and consultative approach and included mapping of ments and balance stakeholder expectations on the time key determining environmental, social and demographic and complexity involved in setting up a system that works characteristics of the State; review of existing techno- for the community. logical solutions used in urban sanitation, demand sup- Tools and measures for communications campaigns for ply gap assessment, the environmental opportunities and increasing public awareness are considered in Chapter 6. scope for various potential technological options; review of capacities of institutions, agencies and departments; and estimation of regional impacts related to GHG, leg- 3.2.14 Public consultations acy dumps, waste accumulation in sensitive environmen- The general public, stakeholders and local authorities tal components, leachate accumulation etc. The SEA then 52 3 Policy planning and legal frameworks proposed recommendations focused on policy level inter- Some countries use the national or ventions (such as land strategies, integrated management regional waste management plans to of waste sheds, recycling, reuse and EPR, institutional capacities), alternatives and inputs to improve existing determine waste treatment and disposal waste facilities in the state (such as improvements to facilities and their capture area. dumpsite/legacy sites, treatment options), directions for designing and managing facilities considering regional 3.3 Legal framework environmental conditions (such as planning for integrated waste management, regional/clustered facilities), neces- 3.3.1 What needs to be regulated sary inputs to waste management institutional strategy The legal requirements are a core element of any national (such as co-ordination and planning, professional devel- waste management system. They create the binding frame- opment of women’s groups, awareness and participation, work to implement plans and strategies, assign roles and monitoring of waste infrastructure and services, linking responsibilities, and regulate and enforce rules. Countries physical planning to infrastructure development, effective looking to achieve step changes in waste management partnership inter-agency participation). need to carefully consider to what extent the body of leg- islation permits the implementation of set goals, whether 3.2.16 Evaluation and review of strategies, it creates a favourable enabling environment for the sec- plans and programs tor or presents legal barriers. This is pertinent especially for the ability to bring in the private sector as owner, oper- Every plan has a limited lifespan. As events unfold, even ator and financier of large infrastructure and operations. after detailed project level feasibility studies and inves- Where the legislative framework and individual acts and tigations some planned activities or infrastructure proj- regulations are restrictive or contradictory and therefore ects will not be implemented. The plans can be affected limit the ability of the sector to perform, legislation needs by unpredicted changes in economic and market condi- to be reviewed, updated and amended. In the absence of a tions, such as the recent fall in fossil fuel prices or the ban favourable legislative environment, sector objectives may imposed in 2018 by China on imports of waste materials. be difficult to achieve. Knowledge also grows as research and development (R&D) efforts advance and new technologies are developed that The following categories of waste management legislation replace or improve existing facilities. National waste could be considered: strategies and plans must therefore be subject to regular ❚ Framework legislation sets out the general principles, reviews and updates. procedures, and requirements in the field of waste man- Reporting progress on implementing plans or strategies agement. Other legal acts must conform to the general is usually done on a periodic basis. The review and revi- requirements of the framework legislation. The main sion process is typically most intensive during the years elements of such legislation are comprised of: immediately following release of the plan. For example, a • Common definitions and waste classification dis- first review may be made after three years and then less tinguishing between hazardous and non-hazardous frequently after that. This encourages realistic short to waste; medium term targets to be set in the plan which can moti- • Basic requirements towards waste prevention, collec- vate action, build momentum and help avoid the possibil- tion, separate collection, preparation for re-use, recy- ity of the plan becoming stale. cling, recovery and disposal; For example, municipalities in Japan are required to • Bans and restrictions, e.g. uncontrolled dumping of develop local solid waste treatment plans over a 10-15- waste; and requirements in the case of waste imports year planning horizon. The plans are reviewed, evaluated and exports; and updated every 5 years. A similar approach is followed • Legal objectives and targets; and planning requirements; in the Republic of Korea. South Africa on the other hand • Responsibilities of institutions, waste generators does not set a fixed plan duration but municipalities are and holders, including documentation and reporting advised to set goals and targets within a 5-year planning requirements; control and enforcement provisions; horizon. • Requirements for obtaining permits or licenses for DBV landfill disposal company, composting and recycling Velbert GmbH. Photo: mauritius images GmbH / Alamy Stock Photo 53 waste treatment and disposal activities and operations; Waste management legislation should be coordinated • Allocation and financing of waste management costs. with legal provisions and procedures which pertain to the fields of environmental and social protection and related ❚ Legal requirements towards facilities define provisions areas, including EIA, prevention of industrial hazards, towards landfilling, incineration and other treatments urban planning requirements, and legislation on chemi- facilities. These includes regulations on the siting of cals and hazardous substances. new facilities, discharge and emission standards, and minimum performance criteria. 3.3.2 Types of legal acts ❚ Legal requirements regarding specific products and The legal requirements relating to waste management may waste streams. The waste streams and categories be introduced through different forms of legal act. The type of legal acts chosen depends on the legal and admin- requiring particular attention usually include municipal istrative system of the country in which the legislation is waste, construction and demolition waste, packaging being enacted and the subjects that are to be regulated. waste, certain categories of plastics, WEEE, batteries and accumulators, sewage sludge, end of life vehicles, The framework requirements should in principle be used tyres, waste oils and textiles. endorsed at the highest regulatory level and common practice is the adoption of a Framework Waste Law or Other legal requirements may also have an impact on equivalent. waste management. The subjects of legal regulation are typically product requirements, activities and production For example, EU the Directive 2008/98/EC54 (Waste processes, environmental quality protection, procedures, Framework Directive)55 sets the basic concepts and defi- responsibilities and rights. nitions related to waste management, such as definitions 54 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives, last amended by Directive (EU) 2018/851 of the European Parliament and of the Council of 30 May 2018. 55 The first Waste Framework Directive was initially adopted in 1975 (Directive 75/442/EEC on waste) and following that period several amendments and revisions occurred. 54 example, in Estonia the requirements for EPR and for man- Clean-Up Day in Estonia. Photo: © Maigi | Dreamstime.com agement of packaging waste are established through a separate Packaging Act57. In Chile, a Plastic Bag Ban Law58 was adopted in 2018. The Law imposes a ban on single use plastic bags in stores and businesses nationwide; and puts local authorities in charge of supervising compliance with the obligations provided by Law. Similarly, in Japan, there are separate laws on treatment of waste and pro- motion of recycling – the Waste Management and Public Cleansing Act59 and the Law for the Promotion of Effective Utilization of Resources60 (see Figure 4). Overarching to these two laws is the Basic Act on Establishing a Sound Material-Cycle Society61 which focuses on reduction of environmental impacts from waste and material circular- ity. It also specifies the roles of different entities: national and local governments, business operators and consumers of waste, recycling, recovery. It explains when waste and implements the polluter pays principle. ceases to be waste and becomes a secondary raw mate- The legal requirements can be supported by various imple- rial (i.e. end-of-waste criteria), and how to distinguish mentation guidelines, instructions and supportive meth- between waste and by-products. The Directive lays down odological procedures and administrative rules. In Japan some basic waste management principles: it requires that for example, six recycling regulations target individual waste should be managed without endangering human products governed under EPR arrangements. health or harming the environment, and in particular without risk to water, air, soil, plants or animals, without Quality and procedure standards, such as ISO62 and CEN63 causing a nuisance through noise or odours, and without or other relevant national standards, are in principle not adversely affecting the countryside or places of special considered part of legislation, except when the use of a interest. Waste legislation and policy of the EU Member specific standard is mandated by specific legal provisions. states should apply as a priority order the following waste Nevertheless, such standards might also have a support- management ‘hierarchy’: the Directive introduces the ‘pol- ive role in the implementation of legislation. luter pays principle’ and the ‘extended producer respon- sibility’. It incorporates provisions on hazardous waste Local authorities also regulate municipal waste manage- and waste oils56, and includes recycling and recovery tar- ment on their territories. Local ordinances outline the gets to be achieved. The Directive requires that Member roles and responsibilities of waste generators and other states should adopt waste management plans and waste stakeholders within their territories, define the specifics prevention programs. EU member states must adopt spe- of waste collection and set up local taxes or service fees to cific national legislation in accordance with the Waste finance the respective services. Framework Directive. Countries should also recognise the obligations arising Other provisions are usually introduced through second- from several international treaties. The Basel, Rotterdam ary legislation that, depending on the specific legal sys- and Stockholm conventions are some of the multilat- tem, might comprise of decrees, governmental regulations eral environmental agreements which share the common or ministerial orders. Some countries however choose to objective of protecting human health and the environment adopt specific laws for subjects of particular interest. For from hazardous chemicals and wastes (see Box 6). 56 Older Directives on hazardous waste and waste oils were repealed with effect from 12 December 2010. 57 RTI, 29.06.2014, 50, https://www.riigiteataja.ee/en/compare_original/524102014004 58 Law 21100, https://www.bcn.cl/leychile/navegar?idNorma=1121380 59 Law No. 137 of 1970, last amended 2001 60 Act No. 48 of 1991 61 Act No.110 of 2000 62 International Organization for Standardization, https://www.iso.org/home.html 63 Comité Européen de Normalisation (CEN) or European Committee for Standardization is the official standardization body of European Union, https:// www.cen.eu/Pages/default.aspx Bridging the Gap in Solid Waste Management | Governance Requirements for Results 55 Figure 4 Japan legal framework for waste management and the promotion of recycling Basic Environmental Act Basic Environmental Plan enacted Nov 1993 enacted Dec 1994 / revised Jun 2012 Basic Act on Establishing a Sound Securing material circulation in society Material-Cycle Society (Basic framework law) Control of consumption of natural resources enacted May 2000 Reduction of environmental impacts Fundamental Plan for Establishing a Sound Material-Cycle Society: Basis for other national plans enacted Mar 2003 / revised May 2013 Law for the Promotion of Effective Utilization Waste Management and Public Cleansing Act of Resources enacted Dec 1970 enacted Apr 1991 (1) Reduction of waste generation (1) Recycling of recyclable resources Recycling (1R) ➞ (2) Proper treatment of waste (inclusing recycling) (2) Devising product design that are easy to recycle Reduce (3) Restricitions on development of waste treatment facilities Reuse (3R) (3) Indications for separation and (4) Regulations on waste treatment companies Recycle collection (5) Establishment of waste treatment standard, other (4) Prootion of effective utilization of by-products Recycling regulations in line with the characteristics of individual items Containers and Small Electrical and Home Appliance Food Construction Material End-of-life Vehicle Packaging Recycling Electronic Equipment Recycling Law Recycling Law Recycling Law Recycling Law Law Recycling Law enacted Jun 1995 enacted May 1998 enacted May 2000 enacted May 2000 enacted Jul 2002 enacted Aug 2012 Air conditioners, Bottles, PET refrigerators/ Food waste from Small electrical bottles, paper and freezers, Wood, concrete, food-related Automobiles and electronic plastic containers televisions, asphalt businesses equipment, etc. and packaging washing machines, dryers Green Purchasing Law (National Initiative to promote the acquisition of recycled products, etc.) enacted May 2000 Source: MOE, History and Current State of Waste Management in Japan, 2014 56 3 Policy planning and legal frameworks Box 6 Selected International Conventions related to wastes The Basel Convention64 on the Control of Transboundary ‘no less environmentally sound’ than the Basel Convention Movements of Hazardous Wastes and their Disposal was cre- (article 11). In all cases where transboundary movement is ated to protect people and the environment from the negative not, in principle, prohibited, it may take place only if it rep- effects of the inappropriate management of hazardous wastes resents an environmentally sound solution, if the principles worldwide. It is the most comprehensive global treaty deal- of environmentally sound management and non-discrimina- ing with hazardous waste materials throughout their lifecy- tion are observed and if it is carried out in accordance with cles, from production and transport to final use and disposal. the Convention’s regulatory system. The Basel Convention on the Control of Transboundary The regulatory system is the cornerstone of the Basel Movements of Hazardous Wastes and their Disposal Convention as originally adopted. Based on the concept of was adopted on 22 March 1989 by the Conference of prior informed consent, it requires that, before an export may Plenipotentiaries in Basel, Switzerland, in response to a pub- take place, the authorities of the State of export notify the lic outcry following the discovery, in the 1980s, in Africa authorities of the prospective States of import and transit, and other parts of the developing world of deposits of toxic providing them with detailed information on the intended wastes imported from abroad. movement. The movement may only proceed if and when all States concerned have given their written consent (articles The overarching objective of the Basel Convention is to pro- 6 and 7). The Basel Convention also provides for coopera- tect human health and the environment against the adverse tion between parties, ranging from exchange of information effects of hazardous wastes. Its scope of application covers a on issues relevant to the implementation of the Convention wide range of wastes defined as ‘hazardous wastes’ based on to technical assistance, particularly to developing countries their origin and/or composition and their characteristics, as (articles 10 and 13). The Secretariat is required to facili- well as two types of wastes defined as ‘other wastes’ - house- tate and support this cooperation, acting as a clearing-house hold waste and incinerator ash. (article 16). In the event of a transboundary movement of The provisions of the Convention center around the following hazardous wastes having been carried out illegally, i.e. in principal aims: contravention of the provisions of articles 6 and 7, or cannot be completed as foreseen, the Convention attributes respon- ❚ the reduction of hazardous waste generation and the pro- sibility to one or more of the States involved, and imposes motion of environmentally sound management of hazard- the duty to ensure safe disposal, either by re-import into the ous wastes, wherever the place of disposal; State of generation or otherwise (articles 8 and 9). ❚ the restriction of transboundary movements of hazardous The Convention also provides for the establishment of wastes except where it is perceived to be in accordance regional or sub-regional centres for training and technology with the principles of environmentally sound management; transfers regarding the management of hazardous wastes and and other wastes and the minimization of their generation to ❚ a regulatory system applying to cases where transbound- cater to the specific needs of different regions and subregions ary movements are permissible. (article 14). Fourteen such centres have been established. They carry out training and capacity building activities in the The first aim is addressed through a number of general pro- regions. visions requiring States to observe the fundamental princi- ples of environmentally sound waste management (article 4). Starting from December 2019, the Ban Amendment to the A number of prohibitions are designed to attain the second Basel Convention prohibits shipments of hazardous waste aim: hazardous wastes may not be exported to Antarctica, from OECD countries to non-OECD countries for disposal or to a State not party to the Basel Convention, or to a party recovery. The Basel Convention was amended to include plas- having banned the import of hazardous wastes (article 4). tic waste in a legally-binding framework which will make Parties may, however, enter into bilateral or multilateral global trade in plastic waste more transparent and better agreements on hazardous waste management with other par- regulated, whilst also ensuring that its management is safer ties or with non-parties, provided that such agreements are for human health and the environment. At the same time, a See http://www.basel.int/ 64 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 57 Box 6 Cont. new Partnership on Plastic Waste was established to mobilise The Stockholm Convention67 on Persistent Organic Pollutants business, government, academic and civil society resources, (POPs) is a global treaty to protect human health and the interests and expertise to assist in implementing the new environment from highly dangerous, long-lasting chemicals measures, to provide a set of practical supports – including by restricting and ultimately eliminating their production, tools, best practices, technical and financial assistance. use, trade, release and storage. The Bamako Convention65 is a treaty of African nations pro- The International Convention for the Prevention of Pollution hibiting the import into Africa of any hazardous (including from Ships (MARPOL Convention68) initially adopted in 1973 radioactive) waste. The Bamako convention is a response is the main international convention covering prevention to Article 11 of the Basel convention which encourages par- of pollution of the marine environment by ships from oper- ties to enter into bilateral, multilateral and regional agree- ational or accidental causes. The Convention includes regu- ments on Hazardous Waste to help achieve the objectives of lations aimed at preventing and minimizing pollution from the convention. ships – both accidental pollution and that from routine oper- ations – and currently includes six technical Annexes. Annex The Rotterdam Convention66 on the Prior Informed Consent V Prevention of Pollution by Garbage from Ships deals with Procedure for certain hazardous Chemicals and Pesticides different types of waste and specifies the distances from land in international trade provides Parties with a first line of and the manner in which they may be disposed of. One of the defence against hazardous chemicals. It promotes interna- most important features of the Annex is the complete ban tional efforts to protect human health and the environment imposed on the disposal into the sea of all forms of plastics. as well as enabling countries to decide if they want to import hazardous chemicals and pesticides listed in the Convention. 65 See https://treaties.un.org/pages/showDetails.aspx?objid=080000028009385c 66 See https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XXVII-14&chapter=27&clang=_en 67 See https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XXVII-15&chapter=27&clang=_en 68 See https://www.imo.org/en/About/Conventions/Pages/International-Convention-for-the-Prevention-of-Pollution-from-Ships-(MARPOL).aspx 3.3.3 Legislation as a process focusing on special waste streams and product categories. In practice however since a body of legislature is always The development of national legislation should be viewed in place, the process consists of review to identify main as a process that requires periodic revisions and amend- areas of concern or in need for update, followed by revi- ments to accommodate the needs of an evolving sector. sions of respective legal instruments. As such, rarely is the Significant differences exist between countries in their process of reviewing and revising the sector-relevant leg- national laws, legislative procedures, structure, and the islature a one-off activity but rather a continuous process forms, scope and content of legal acts that regulate the (see Box 7 with an example from Morocco). waste management sector. The process is also influenced The usual approach is to designate a competent authority by the different historical practices and traditions of the or authorities at national level to take overall responsibil- respective legal system. In this regard, similar legal pro- ity for the coordination of the entire process and further visions could be established in different ways according to implementation. national requirements. The process of reviewing national legislation presupposes Logically the process should start with adoption of frame- as a first step the preparation of a complete and precise work legislation that is later supplemented with further assessment of the legislative and administrative ‘gaps’ requirements for specific facilities and operations and which need to be filled.69 69 Guide to the Approximation of European Union Environmental Legislation, European Commission, 1997 58 3 Policy planning and legal frameworks The coordinating authority should consider the choices downstream effects of legislative change on associated to be made and the content of national legislation, as, fields. A road map for drafting new legislation identified for example, in deciding if new legislation is needed or through this process is typically prepared and incorpo- whether existing legislation should be amended. The rated into the legislative program of the government and involvement of different levels of government and differ- the national legislative body (when relevant) and/or other ent institutions must be planned carefully, as should the regulatory bodies. Box 7 Legal reforms in Morocco with regards to waste management services Legal reforms in Morocco have closely followed the processes national policies and the two main principles of (1) imple- of urbanization and decentralization. A fundamental reform menting integrated and affordable waste management sys- of the decentralization framework governing local authorities tems and (2) reducing adverse impacts on health and the (referred to as ‘communes’) came with the Decentralization environment. More specifically, the law establishes the insti- Law of 1973 and the adoption of the Charter of 1976. The tutional framework for the sector, the planning principles for Charter provided the communes with more responsibili- infrastructure and services, adopts specific fiscal instruments ties for the management of local affairs and transferred the to finance waste management, requirements for sanitary dis- power to execute Council decisions from central government posal facilities and surveillance and monitoring of waste representatives (e.g. Caïds) to the elected Presidents of the related activities. Councils.70 The Chapter was the first step in defining the roles By 2006, waste management had become a national prior- and responsibilities of councils in terms of sanitation. This ity, calling for strategic actions. In this context, in 2008 the initial step was followed in 2002 by a second Charter, which Government of Morocco launched the Programme National devolved all services in relation to municipal waste to the des Déchets Ménagers (PNDM)71 with the support of inter- communes. The possibility of delegating services to private national donors, the objective of which was to operational- operators was also provided for, which opened the door for ize Law 28-00 by providing technical and financial support service privatization that was subsequently initiated in major to municipalities. The specific objectives of PNDM were to cities such as Fès, Rabat, Oujda and Casablanca. improve collection rates and develop modern disposal facili- The Charter of 2002 also unified the management of cities ties. Leveraging the private sector was identified as the best with more than 500,000 inhabitants, which had previously way to rapidly achieve operational objectives. The PDNA pro- been hampered by a fragmentation across district coun- vided communes with assistance towards financing the cost cils, under the authority of a central council. In 2008, the of delegated services. A total contribution of USD 4 billion Government of Morocco initiated a revision of the Charter over 15 years (2008 to 2022) was secured for both capital in order to provide, inter alia, formal legal status to group- and, partially, operating costs. ings of municipalities and to enable them to act as special As a result of the PDNA, more than 90 private contracts cov- purpose vehicles. The adoption of the amended Charter by ering 80 percent of the urban population have been signed. the Parliament took place in December 2008. These reforms Morocco has reached a collection rate exceeding 85 percent, provided the possibility for cohesive municipal manage- compared to 45 percent in 2008, and 73 percent of collected ment over larger territories. For example, the territory of municipal waste is disposed of in sanitary landfills as com- Casablanca was united under one entity, instead of the prior pared to 11 percent in 2008. However, some objectives have 28 communes. not yet been achieved, examples being the rate of recycling With regard to waste management, the main legal evolution is only 4.3 percent and only 22.7 percent of dumpsites have occurred in 2006, through Law 28-00, which established been rehabilitated.72 The PDNA is expected to close in 2022. 70 World Bank, Decentralization and Deconcentration in Morocco: Cross-Sectoral Status Review. Washington, DC, 2009 71 The PNDM was formally adopted by the newly appointed Government in its program announced in October 2007 and sets out, among other objectives, service and disposal standards for urban areas, quantitative goals for collection coverage (90 percent by 2021), the introduction of sanitary landfills (100 percent of urban areas equipped by 2021), and the closure and rehabilitation of 300 existing open dumps as well as the promotion of solid waste reduction, recovery and valorization. Source: Ibid 72 Etude relative à l’Evaluation du Programme National des Déchets Ménagers (PNDM),  Ministère de l’Energie, des Mines, de l’Eau et de l’Environnement, 2019 and Ministère de l’Interieur, Portail des Collectivités Locales, (2019) Recycling paper in Curitiba, Brazil. Photo: Marcelo Rudini / Alamy Stock Photo 59 3.4 Legal requirements and and control of waste activities. The introduction of techni- cal requirements for the various activities and categories Implementation of waste treatment facilities and installations must ensure There are linkages between legal acts and key policy and the protection of the environment and the prevention of administrative questions that need to be addressed in risks of pollution and damage to human health. To this order to secure effective regulation. As such, legal regula- end, mechanisms should be authorised in law and imple- tion of the waste management sector can be considered as mented to control and impose sanctions as necessary. comprising of three elements73: Legislation should distinguish between the specific ❚ To develop and formally adopt the respective legal acts. requirements of specific waste categories, taking account of their quantities and properties, the risk they pose to the ❚ To provide the institutional structures and financial environment, their potential for reuse and recycling and means needed to implement the legal acts adopted. related factors. ❚ To provide the controls and penalties needed to ensure Responsibilities for funding waste activities and how that the law is properly and fully complied with they are to be financed are also subject to legal regula- (enforcement). tion. Regulation may cover such activities as levying ser- vice charges on users, the provision of financial support to 3.4.1 Legal requirements established at national low-income or vulnerable households, regulating the pro- level vision of state aid and the use of economic instruments. National legislation provides the framework for all activ- Legislation should also mandate the provision of informa- ities in the waste management sector. It should be based tion to the public and service users on, for example, the on established definitions and prescribe the responsibil- aims of government policy on waste management, dis- ities of the competent authorities at national and local couraging anti-social practices such as illegal dumping, level. National legislation must also define the obligations and promoting more desirable and sustainable patterns of of stakeholders, beginning with the requirements for the waste management. prevention of waste generation up to its final recovery or disposal. Legal requirements should differentiate between A long list of legal requirements typically adopted at the waste producers and holders and may also include provi- national level is presented in Box 8 (guided by the Waste sions for EPR. Framework Directive74). Legislation should also provide for administrative proce- dures related to the classification, reporting, authorization Based on Guide to the Approximation of European Union Environmental Legislation, European Commission, 1997 73 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives 74 60 3 Policy planning and legal frameworks Box 8 Legal requirements typically reflected in national-level legal instruments Definitions Responsibilities and powers of competent authorities When preparing national laws, particular attention is given Competent authorities should be designated at the national, to definitions. Terms such as ‘waste’, ‘treatment’, ‘disposal’, regional and local levels and have the technical capacity to ‘recovery’, ‘recycling’ and ‘re-use’ need to be carefully and control waste management in the national territory. accurately defined. Special attention is usually given to dis- The responsibilities at different tiers of government must be tinguishing ‘hazardous waste’ form other wastes and to pro- defined according to specific institutional roles with respect viding clear definitions of the different waste types and to waste management policies and regulations, organization categories, including ‘municipal waste’. of waste management operations and services, registration According to OECD, ‘municipal waste’ is defined as waste col- and control over various generators and holders of waste, lected and treated by or for municipalities. It covers waste issuing waste management permits and licenses for facilities from households, including bulky waste, similar waste from and operations, implementing documentation and report- commerce and trade, office buildings, institutions and small ing requirements, control and enforcement of legal require- businesses, as well as yard and garden waste, street sweep- ments. The legislation might also provide for establishing ings, the contents of litter containers, and market cleansing new coordination and consultation bodies, such as councils waste if managed as household waste. The definition excludes and inter-ministerial working groups, for tackling specific waste from municipal sewerage networks and treatment, as waste management issues. well as waste from construction and demolition activities. Responsibilities of waste generators and holders of waste Waste classification The legislation should prescribe in detail the obligations, In addition to waste definitions a clear system for classifica- responsibilities and requirements to be followed by waste tion of waste must be established. Presently there is no com- generators and holders. For the management of municipal mon classification of waste that is recognized by all countries waste the specific responsibilities should relate to households and that is fit for all purposes. The internationally used classi- and other commercial, institutional or industrial entities. fication systems such as the Basel Convention categories and Such requirements should cover the entire product and waste lists of waste75 and OECD Green and Amber lists76 are mainly chain and focus on waste prevention, the safe storage and used in the case of transboundary movements of hazardous treatment of waste, maximizing the potential for re-using and other waste types. In parallel, separate and more detailed and recycling waste, and obligations for transferring waste to national waste classification systems – which typically distin- professional recovery or disposal operators. guish waste by origin, type, chemical composition and char- acteristics – apply for general purposes. An example of such In some cases and for specific categories of waste the legis- a classification system is the European List of Waste (EWL)77. lation can require the transfer of waste to be based on writ- ten contract. General provisions The legislation must also allocate responsibilities for deal- A central obligation is for competent authorities to ensure ing with abandoned waste in cases where the previous waste that, where waste arises, it is recovered and disposed of with- holder or generator cannot be identified. out causing harm to the environment or endangering human health. They must also ensure that the abandonment, dump- A legal definition of waste ownership could support smooth ing and uncontrolled disposal of waste is prohibited. allocation of responsibilities between waste generators, holders, service providers and local authorities. Requirements prohibiting dilution of hazardous waste, mixing of hazardous and non-hazardous waste must be established. 75 The classification of waste according to Basel Convention is based on following Annexes: Annex I - Categories of wastes to be controlled; Annex II - Categories of wastes requiring special consideration; Annex III - List of hazardous characteristics; Annex VIII - List A and List B. See https://www.basel. int/portals/4/basel%20convention/docs/text/baselconventiontext-e.pdf 76 Established by the OECD Council Decision (OECD/LEGAL/0266). See https://www.oecd.org/env/waste/theoecdcontrolsystemforwasterecovery.htm 77 Established by Commission Decision 2000/532/EC Bridging the Gap in Solid Waste Management | Governance Requirements for Results 61 Box 8 Cont. Permit requirements The entities providing waste treatment, recovery and dis- posal services are in principle required to obtain a permit or license for their activities and for the operation of related facilities and installations. The permit requirements must also cover the collection and transport of hazardous waste and, if appropriate, other waste types. The procedures for applying for, obtaining, amending and withdrawing permits or licenses must be precisely defined with respect to specific waste management operations. The permit procedure should start with an application sub- mitted to a competent authority. It should contain detailed HDPE liner for new landfill cell construction. Photo: © Mike Kleist | Dreamstime.com information on: the types, characteristics and quantities of Registration procedures waste intended for treatment; waste origin; information on the site where the facilities are to be located; the technolo- The legislation might exempt certain waste management gies and equipment envisaged; measures proposed to pro- activities and operations from permit requirements. Such tect human health and the environment during operations; exemptions are usually provided for transport and collection expected emissions and resulting residues from the opera- of non-hazardous waste and could be combined with quanti- tions; the availability of qualified personnel for site moni- tative thresholds. For waste management activities not sub- toring plan, justification and other relevant information. The ject to permit requirements a registration procedure might legislation must the specific information that must be pro- need to be established. vided in the application related to treatment and disposal Obligations for documentation and reporting facilities such as landfills, incineration plants and others. Additional information and clarifications might be requested Operators of waste collection, separate collection, recycling, during the permitting process. treatment, recovery and disposal services must keep records and provide information to competent authorities about the Following the review of the application and site visit as rel- quantities of waste collected, recycled, recovered and dis- evant, the competent authority must ensure that the appli- posed of. cant is an appropriate and competent waste management site operator. The permit issued must include specific conditions The documentation and reporting requirements can also be on future operations, including requirements concerning site extended to local authorities. closure. The responsibilities of the national authorities for prepar- The competent authority should also take responsibility for ing annual reports and for analysing various aspects of waste monitoring site activities and for responding to complaints management must also be established. from affected parties. Data sources available on municipal waste can include writ- The environmental impact assessment procedure may be ten surveys, administrative data, data collected from waste integrated into the permitting procedures for landfills, treatment facilities and data collected from municipalities78. waste incineration installations and other waste treatment Information on municipal waste should distinguish between operations. municipal waste quantities generated and collected. If col- The waste management permit procedure may also be com- lection services do not cover the entire population then esti- bined and/or incorporated into a general environmental mates of the amount of waste generated by the excluded part permit. of the population must be made. The information in this section is based on Guidance on municipal waste data collection, Eurostat – Unit E2 – Environmental statistics and accounts, 78 Sustainable development, 2017 62 3 Policy planning and legal frameworks Box 8 Cont. The good practice is to allocate data on waste generated and incineration (with or without energy recovery), recycling and collected by its origin to: (i) households, (ii) commerce and composting. If waste is pre-treated (e.g. at a sorting or MBT trade (small businesses, office buildings, institutions), and plant), outputs from the pre-treatment processes should ide- (iii) municipal services (street and market cleaning, yard ally be reported according to their intended treatment by one waste, litter containers). The data could also be distinguished of these operations. according to household waste and similar, bulky waste and If data are based on inputs, estimates should be provided on other categories as appropriate. Estimates of the quantities of waste composted at home should also be considered. the recycling efficiency of pre-treated material. That is, data should distinguish between the share that is recycled and the The reporting should also include details on the composi- share that becomes sorting residue to be disposed of to landfill. tion and sources of household/municipal waste. For that pur- pose, many countries have standardized the requirements Reporting could be done according to municipal waste codes and published methodological guidelines on municipal waste and categories that cover paper and cardboard, plastic, glass, composition surveys. Responsibility for conducting periodic metals, textiles, biodegradable kitchen and garden waste, composition surveys can be an obligation of local authorities/ market waste, bulky waste, street cleaning residues, house- service providers or may be organized and contracted at the hold hazardous waste and any other relevant fractions. national level. In addition to the above, data must be included on any sepa- If an EPR scheme for packaging waste is in place then the data rately collected fractions of municipal waste that have been reported must distinguish between packaging and non-pack- imported or exported. In this case, the analysis must explain aging materials and between the different sources of packag- how the reuse and recycling rates attributed to these amounts ing waste (households, businesses). have been derived and monitored/validated. Information collected is also appropriate to include data on The data analysis provided by the competent authority the amounts of waste directed towards and managed by the responsible for data management must describe the data val- various treatment operations. idation processes used and comment on the level of accuracy of the data presented. Information collected should include data on the amounts of waste directed towards and managed by the various treat- Cost coverage and financing of waste management ment operations. Clear responsibilities for how waste management costs are Reporting on municipal waste treatment may be sub-di- to be covered by waste generators or waste holders must be vided into four treatment operations, for instance: landfill, established. Underground containers, Delfgauw, the Netherlands. Photo: Dafinchi Bridging the Gap in Solid Waste Management | Governance Requirements for Results 63 Box 8 Cont. Legislation commonly gives local authorities powers to and, and when relevant, specific requirements. Waste preven- establish and determine local fees and taxes. In these cir- tion targets, prevention programs and policies on green pub- cumstances clear rules or guidance are needed on tariff calcu- lic procurement are examples of waste prevention measures. lation methodologies; the problem of competing affordability Other legal requirements, such as the introduction of quan- and financial sustainability constraints and the potential role tity-based charging mechanisms to reflect the polluter pays of grant funding in resolving it; and cost recovery policy and principle, can have an indirect impact on waste prevention. its related implementation and charging mechanisms. Preparation for re-use, recycling and recovery It is also in the interests of protecting public health and the environment that responsibilities should be allocated for The legislation should set out objectives relating to the prepa- cleaning up abandoned waste sites and for funding the costs ration of municipal waste for re-use, recycling and recovery, of doing so. objectives which are closely linked to the provisions in the law related to the ‘waste hierarchy’. Waste collection requirements In addition to the objectives, the responsibilities of waste Legislation may prescribe specific responsibilities for organiz- generators, waste holders and competent authorities must ing waste collection so that waste generators are either served also be established. by a professional waste collection operator or have available to them a designated place in which to discard their waste. Quantitative targets can be set for the separate collection, re-use, recycling and recovery of municipal waste and for Municipal services commonly provide for the collection of specific waste fractions. The procedures for calculating and/ the following categories of waste: residual/mixed household or measuring the targets to be achieved must be defined and waste; recyclable waste fractions, including paper and card- aligned with the requirements for documentation and report- board, plastics, glass and metals; biodegradable waste frac- ing as set in the law. Responsibilities for achieving the tar- tions such as food and garden waste; household hazardous gets can be designated to specific authorities or stakeholders. waste; bulky waste; construction and demolition waste origi- Prevention, re-use, recycling and recovery targets can also be nating from households; and textile waste. established for specific waste streams, including packaging Legislation may define the municipal waste fractions that waste materials, biowaste and WEEE. must be collected separately and the timeframes within Disposal of waste which the separate collection services must be implemented. Such requirements may cover the entire national terri- Requirements for the safe disposal of waste must be estab- tory or be limited to specific settlements based on popula- lished. The legal provisions which govern waste disposal tion size. In some cases, rural or isolated areas are excluded must be linked to waste permit requirements and illegal dis- either partially or entirely from the separate waste collection posal must be criminalized. requirements. The legislation should also define responsibilities for estab- Minimum standards, such as the collection frequency of lishing a system of disposal facilities which is considered nec- residual waste, are sometimes defined in national legislation essary and appropriate to national circumstances. but this is uncommon, with such requirements usually being Developing clear standards for landfill (and for other waste set at the local authority level. treatment and disposal facilities) is a key mechanism for Setting targets for waste collection can also drive local gov- improving waste disposal practices and for addressing the ernment performance (for example, by requiring local govern- uncontrolled dumping of waste. This crucial factor has to be ments to provide collection services for a set proportion of the addressed, as uncontrolled dumping damages the local envi- population or for a specific waste category by a fixed date). ronment of large numbers of residents by polluting their local surface water, drainage channels and groundwater, and cre- Prevention of waste ating dust, litter, air pollution and foul odours. It is also a key Consistent with ‘waste hierarchy’, the prevention of waste measure for reducing plastics pollution, where plastics com- is a desired outcome. National legislation should establish monly escape into the environment and water courses from mechanisms for supporting the achievement of this outcome indiscriminate dumping of waste. 64 3 Policy planning and legal frameworks Box 8 Cont. Technical requirements and procedures towards opera- activities needed to achieve compliance with standards and tions, facilities and installations to tackle uncontrolled dumping of waste. Without adequate enforcement there is a high risk that the lowest cost option The technical requirements for landfill, incineration, co-incin- (i.e. dumping) may prevail, leading to a continued practice of eration, composting and other recovery and disposal opera- dumping and uncontrolled landfill. tions should be defined as comprehensively as possible. Penalties and sanctions National government has the key role in setting the legisla- tive framework for landfill standards. Either they are set out The legislation should lay down provisions setting the penal- directly in legislation or responsibility for setting them is del- ties and sanctions applicable to infringements of the provi- egated to a government agency. sions of the legal requirements and the designated competent authorities should take all the measures necessary to ensure Standards should cover all activities undertaken at a facil- that they are implemented. The penalties should be effective, ity across its lifetime. They cover planning, site selection, proportionate and dissuasive. design, construction, operation, closure, site decommission- ing and aftercare. They can also cover products, residues and Extended producer responsibility emission discharges from the different categories of facility. Responsibility for the management of specific waste streams The competent authorities may decide to ensure that landfill could be extended to producers and importers of products operators are required to make adequate financial provision and packaging that become waste at the end of their life cycle. over the life of the landfill to enable them to guarantee the The product categories and waste streams typically covered proper closure and aftercare of the landfill. by extended producer responsibility schemes are packaging and packaging waste, waste electrical and electronic equip- Standards could be implemented progressively in the con- ment, batteries and accumulators, used tires, waste oils, and text of widespread uncontrolled dumping. In the process of end-of-life vehicles. Other product categories, including tex- drafting of new legislation, careful attention should be paid tile waste and agricultural plastics, can be included. to determining the transitional periods within which existing facilities either achieve compliance with the new legislation Economic instruments and regulations or cease operations. Economic instruments consistent with national waste man- Transboundary shipment of waste agement policy must be established by law. Such instruments might include landfill taxes, and taxes or deposits on specific The legislation must identify the appropriate competent product categories, etc. authority or authorities to control the movement of wastes through national territory; these may involve a combination Waste management strategies, plans and programs of customs, industry or trade, and environmental offices. It is advisable that the requirements for the preparation of It must give guidance to the competent authorities on the waste management strategies, plans and programs by differ- documentation, procedures to be followed for each type of ent administrative authorities and economic entities, and the shipment, and on the enforcement of the controls on the scope and content of such documents, should be defined in trans-frontier shipment of waste. legislation. The legislation thereby sets a common approach, scope and structure for document preparation across all Control and inspection administrations. The legislation should designate competent authorities to Other provisions control the implementation and verify compliance, and define in detail the responsibilities and powers of the competent Other provisions typically covered by waste management authorities at the various administrative levels. legislation include: provision of information to consumers, households and other waste generators; procurement of A minimum period between site inspections should be defined waste management services by public authorities; specific for each category of facility. rules for the use of public funds for financing waste manage- A well-resourced and technically capable national environ- ment activities; and specific rules related to waste pickers mental regulator is essential for conducting the enforcement and the sustainability of their livelihoods. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 65 3.4.2 Legal requirements established at The adoption of legal requirements is local level a necessary but not sufficient condition Local authorities need the authority and capacity to define for effective strategy implementation. and implement the specific local waste management There are many examples where visions requirements of the sector. If national legislation does not created in legislation have failed to be assign to local authorities the legal powers necessary for them to do this, then this can become a significant barrier implemented and translated into viable to them in organizing the services. and beneficial outcomes. The scope and legal form in which waste management place adequate infrastructure for the safe collection, sort- requirements are commonly defined at the local level can ing, transport, recycling, resource recovery and disposal vary considerably. For example, the requirements might of all types of waste. In terms of the timing of implemen- legally be defined by the actions of the local authority in tation, it is essential that the administrative requirements defining the technical components of a sanitary cleaning are introduced at all levels of government at the very scheme, such as collection methods, container site loca- beginning of the process, and that effort is placed heavily tions, collection frequencies and designated waste treat- on ensuring that the necessary adjustments and improve- ment and disposal facilities. In another example, the ments are introduced at the local level. requirements might be satisfied via administrative orders that mandate the responsibility on households and legal Implementation of the new legislation encompasses the entities to discard waste at designated places and to fol- need for changes to be made to public institutions, proce- low specific rules. dures and standards at all levels of government. Responsible ministries and authorities must recognise the scope and A more advanced form is to adopt local regulations scale of these institutional changes and the costs associ- whereby various elements of the waste management sys- ated with implementing them. They must also understand tem are defined. These might define a requirement to sep- that early and effective implementation of these changes is arately collect different waste fractions, a responsibility to a prerequisite for successful implementation of the strategy provide containers and other waste collection infrastruc- and for the achievement of its objectives.79 ture, the size of local service fees or taxes or any other issue relevant to local waste management systems. Local The costs of implementing administrative change are not regulations might in some cases also establish the penal- inconsiderable. Looked at simply in terms of direct costs, ties and sanctions to be applied at the local level. It should it quickly becomes clear that the changes will have sig- be noted that local regulations can prescribe additional nificant budgetary implications, especially for local gov- and sometimes more restrictive requirements to those ernments. For example, how many waste management established at the national level. For example, many cit- permits must be issued? Do the competent public authori- ies have banned the use of plastic bags and certain sin- ties have the necessary human and technical resources? Is gle-use plastics prior to adoption of similar legislation at additional training needed for local authority waste man- national level. There are also examples where cities have agement specialists? Are sufficient accredited laboratories decided to adopt more ambitious recycling targets than available to conduct waste characterization analyses? Will those assigned at national level. specialized software be developed or purchased to allow for electronic submission and processing of annual waste It is important that local regulations provide residents management reports? and other users with the right to submit claims related to the quality of services received either directly to the local A thorough evaluation of the investment and operational authority or to the service provider. costs of the institutional changes needed at all levels of government should be carried out and mechanisms iden- 3.4.3 Implementation considerations tified for how these may be funded. This kind of evalua- Successful implementation of the strategy and its legal tion must be made at all administrative levels in tandem requirements depends, crucially, as much on the effective with the preparation of strategies and plans. It is essen- implementation of its administrative requirements at the tial that the lead for assessing the financial consequences national, regional, and local levels as it does on having in of the necessary institutional changes should come from Based on Guide to the Approximation of European Union Environmental Legislation, European Commission, 1997 79 Discussion about plastic recycling in Shenzhen, China. T. Photo: © Waihs | Dreamstime.com 66 central government and that coordinating mechanisms are ❚ Trainings and qualification courses to increase the put in place to ensure that all levels of government remain knowledge and qualification of their members. informed of activities and progress in this vital area. ❚ Assisting national and local authorities in improving It follows that the adoption of clear and detailed legal waste management policies and regulations as well as requirements is a necessary but not sufficient condition for streamlining their implementation. effective strategy implementation. There are many exam- ples where visions created in national legislation have ❚ Establishing a consultation platform for the waste man- failed to be implemented and translated into viable and agement sector. beneficial outcomes, or where implementation has been ❚ Following the developments of international trends achieved only after significant delay. A core reason for this is that insufficient attention is given during the strat- in new and innovative practices, technologies and egy formulation process to recognising and resolving the equipment. many obstacles faced by local authorities in their efforts ❚ Supporting the establishment of markets for recycled to implement the strategy. These aspects are discussed in materials. subsequent Chapters. ❚ Supporting competition in providing waste manage- 3.4.3.1 Role of waste management associations in ment services and resource recovery. promoting sustainable waste management practices and enhancing capacities ❚ Attracting public attention to the waste management, Waste management associations and similar professional increasing visibility and improving transparency in the bodies could greatly facilitate the implementation of envi- sector. ronmental legislation and policies and aide the process of ❚ Providing broader advocacy on various aspects to sup- professional capacity building. port the development of the sector. National waste management associations could play an Such waste management associations have been proved important supportive role through: to be valuable partners of state and local authorities in ❚ Exchange of experience, promoting good practices, improving waste management practices. organizing conferences and seminars. The associations differ in terms of membership, objectives ❚ Dissemination of information, issuing guidelines, publi- and core activities. cations, brochures, magazines, maintenance of special- ized web sites. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 67 Some national associations involve wide spectrum of enterprises, waste trading companies and other com- stakeholder such as local authorities, public companies, panies that recycle the renewable resources, and it also private waste management operators, producer respon- includes members such as scientific research institutes, sibility organizations, research institutions, large waste colleges, social organizations, individuals, etc. CRRA sub- generators, recycling plants, equipment suppliers, consul- ordinates 16 directly-affiliated units like for example China tants and other interested parties. For example, the Japan Plastic Recycling Association (CPRA). Waste Management Association80 was initially formed in In some countries several organizations could exist. For 1947 with a membership of 33 cities and recently includes example, Danish Waste Association85 represents munici- more than 700 members from the entire waste manage- pal waste units. It has 51 municipalities as members as ment chain. The members of the Waste Management and well as inter-municipal waste management companies and Resource Recovery Association of Australia (WMRR)81 also facilities for hazardous waste in Denmark and the Faroe range from large multinational corporations, small and Islands. Waste and Resource Network Denmark (DAKOFA)86 medium enterprises, local and state governments, equip- is an independent member-based organization and has ment and service providers, and individuals. roughly 250 members including national and local author- Other associations are focused on a subset of waste man- ities, waste management service providers from both pub- agement aspects, like for example recycling or represent lic and private sector, waste producers, waste handlers, specific group of public or private stakeholders. consultants and suppliers, all of whom operate within the field of waste and resources. Some associations are mainly focused on local authori- ties and public utilities. For example, Verband kommu- The waste management associations could also play naler Unternehmen e.V. (VKU)82 is the German Association a regional role like for example the Institute of Waste of Local Utilities has 1,500 member utility companies pri- Management of Southern Africa (IWMSA)87, that was marily active in the fields of energy supply, water sup- initially founded in 1976 in South Africa; since 1992 ply and sewage, waste management, municipal cleaning it expanded its activities into the neighbouring coun- and telecommunication. In Bulgaria, the Association of tries Botswana, Zambia and Zimbabwe. The Solid Waste Municipal Environmental Specialists (AESMB)83 involves Association of North America (SWANA)88 is another exam- as members individuals working in the administration of ple. It is the world’s biggest professional waste organi- all local authorities in the country. Its primary focus is the zation of more than 10,000 public and private sector improving qualification of the municipal staff working in professionals in the US, Canada and the Caribbean. the field of environmental protection and waste manage- The national waste management associations are also ment in particular, to develop the necessary institutional members of international or regional umbrella organiza- capacity at local level and assist both state and local tions. In this way exchange of information and partnership authorities in developing and implementing environmen- between the national organizations is achieved that sup- tal legislation and policies. ports the dissemination of good practice and latest devel- Other associations are more oriented to specific recy- opments in the world. cling industries. For example, China National Resources For example, Municipal Waste Europe (MWE)89 is the Recycling Association (CRRA)84 is a state-level industry European umbrella association of national public waste organization. CRRA is composed of over 1,200 members associations and its members provide services to over including processors and traders from the nationwide 60 percent of populations in their countries. represent- professional companies (groups), industrial and mining ing public responsibility for waste. MWE promotes the 80 See http://www.jwma-tokyo.or.jp/ 81 See https://www.wmrr.asn.au 82 See http://www.vku.de 83 See http://www.bamee.org/ 84 See http://www.chinacpra.org.cn/en/ 85 See http://www.danskaffaldsforening.dk 86 See https://dakofa.com/ 87 See http://www.iwmsa.co.za 88 See https://swana.org 89 See https://www.municipalwasteeurope.eu/ 68 3 Policy planning and legal frameworks interests of its members at EU level, through joint posi- 3.4.4 Enforcement tions on waste management issues and legislation and keeps its members informed on the latest policy develop- Appropriate measures, mechanisms and systems are ments. The association encourages the sharing of informa- needed to improve monitoring and control of waste man- tion among its members, including the exchange of good agement services so as to ensure that legislation is prop- practice in the local management of waste. erly implemented and eventually enforced. Strengthening inspection systems and introducing administrative and The international waste management associations could judicial measures are examples.92 also provide support to state authorities in setting up sustainable waste management practices. Such support Responsibility for enforcing legal requirements for waste could be delivered either directly through dissemination management should be clearly defined at each administra- of information, trainings or technical assistance or chan- tive level and the capacities and resources needed to meet neled through the respective national waste management those responsibilities defined and established within the associations. relevant competent authorities. The International Solid Waste Association (ISWA)90 sup- The control procedures established should primarily focus ports sustainable and professional waste management on large waste generators, companies providing waste col- worldwide. Its members include waste management lection services and waste treatment and disposal installa- practitioners, local authorities and private sector oper- tions. Sufficient resources should be allocated for dealing ators as well national waste management institutions. with illegal waste dumping. In this regard, coordination The Association conducts a wide range of activities in and monitoring mechanisms must be developed to ensure support of the sector including promoting resource effi- that all local authorities comply with and implement their ciency, sharing experience, knowledge and information responsibilities as envisaged in national legislation. on different aspects of waste management, providing sup- Similar to GHG emissions, the quantities of solid waste port to developing and emerging economies, achieving generated and the efficacy of collection and proper recov- advancement of waste management through education ery and disposal need to be credibly measured at the local and training, promoting appropriate and best available government level and independently verified. For that technologies and practices, developing professionalism purpose, appropriate reporting requirements should be in waste sector through its program on professional qual- established and key performance indicators defined and ifications. Together with the issuing guideline documents regularly monitored. and policy papers, the ISWA through its digital library is providing access to scientific and technical information The number and costs of additional personnel, equipment, covering the latest developments in all aspects of waste guidance and training needed by the relevant competent management from the global waste community. authorities should be carefully considered when decid- ing on the enforcement measures and procedures to be Another example is the Bureau of International Recycling implemented. (BIR)91 which is the world largest recycling industry fed- eration representing over 760 member companies from the private sector and 37 national associations, in more than 70 countries. BIR comprises four commodity divi- A specific example of legal procedure at sions for iron & steel, non-ferrous metals, paper and tex- the supra-national level comes from the tiles, and has four commodity committees dealing with stainless steel & special alloys, plastics, tyres and rubber, European Union (EU). EU Member states and E-scrap. The federation provides a dynamic forum for are obliged to incorporate EU directives its members to share their knowledge and experience and into national law to ensure direct serves as a platform to establish successful business rela- conformity with a directive’s objectives, tions and to promote recycling among other industrial sec- tors and policy makers. requirements and deadlines. 90 https://www.iswa.org/ 91 https://www.bir.org/ 92 Based on Guide to the Approximation of European Union Environmental Legislation, European Commission, 1997 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 69 A specific example of legal procedure at the supra-national from citizens, businesses or other stakeholders. If the EU level comes from the EU. EU Member states are obliged to country concerned fails to communicate measures that fully incorporate EU directives into national law to ensure direct transpose the provisions of directives, or does not rectify conformity with a directive’s objectives, requirements and the suspected violation, the EU Commission may launch a deadlines. In transposing a directive a member state may formal infringement procedure. The Commission may refer choose how this will be done, but is bound by the terms of the issue to the European Court of Justice, which in certain the directive as to the results to be achieved and the dead- cases may imposed financial penalties95. line by which transposition is to be achieved93. This pro- If the Court finds that a country has breached EU law, the cess is known as transposition. national authorities must take action to comply with the According to the EU treaties, the European Commission94 Court’s judgment. may take legal action – an infringement procedure – against In 2019 the European Commission initiated 58 infringe- an EU member state which fails to implement EU law. The ment measures against EU member states, representing 17 Commission identifies possible infringements of EU law on percent of all cases in the environment sector. the basis of its own investigations or following complaints 93 At a glance - Implementation in action. Transposition, implementation and enforcement of Union law, European Parliamentary Research Service, 2018 94 The European Commission is the executive body of the European Union, which has the power to propose legislation and is also responsible for implementing, monitoring and controlling the enforcement of Community law and policy. 95 When referring an EU country to the European Court of Justice (ECJ) for the second time, the Commission proposes that the court impose financial penalties, which can be either a lump sum and/or a daily payment. These penalties are calculated after taking into account the importance of the rules breached and the impact of the infringement on general and particular interests; the period over which the EU law has not been applied; and the country’s ability to pay, ensuring that the fines have a deterrent effect. The amount proposed by the Commission can be changed by the ECJ in its ruling. Recycled plastic chips in Dhaka, Bangladesh. Photo: Muhammad Mostafigur Rahman / Alamy Stock Photo Kuala Lumpur, Malaysia: Vertical garden made of in recyclied plastic bottles. Photo: © Aisyaqilumar | Dreamstime.com 4 71 Financing for sustainability and as an incentive 72 4 Financing for sustainability and as an incentive 4.1 Recognizing the need for significantly exceeded expenditures on other environmen- tal sectors, including wastewater, pollution abatement sustainable financing and biodiversity (see Figure 5). The provision of waste management services incurs sig- The share of waste management costs in public expen- nificant financial costs. The availability of investment and ditures at the local level is typically significantly higher operational finance is arguably the single most critical fac- than this, exceeding 20 percent of local budgets in low-in- tor in determining the sustainability of municipal waste come countries where services are provided directly by services. the municipalities. In middle-income countries, waste International Monetary Fund (IMF) data on government management costs account for some 10 percent or more budget expenditures indicate that as much as 0.8 percent of municipal budgets, and 4 percent in high-income of national GDP96 is allocated to public expenditures on countries.97 waste management, from a combination of local govern- Experience shows that it is easier to mobilise funds for ments’ own resources, grant support and transfers to local investment financing than it is to generate those needed authorities from central or regional government budgets. to cover the recurrent operational needs of the system. A closer look shows that central, state and local govern- Funding for capital assets has potential access to a vari- ment expenditures vary considerably. Within the EU, as a ety of sources, from local and international capital mar- percentage of GDP, in 2018 Greece recorded the highest kets, IFI funding and from across all tiers of government, expenditure of 0.6 percent, with the average for the EU including municipal capital reserves and central govern- as a whole of 0.4 percent. It should be noted that in many ment transfers. EU countries public expenditure on waste management Figure 5 EU countries total general government expenditures on environmental protection, 2018 (% of GDP) 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 EU-27* EU-28 euro area Belgium Bulgaria Czechia Denmark Germany Estonia Ireland Greece Spain** France** Croatia** Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal*** Romania Slovenia Slovakia** Finland Sweden United Kingdom Iceland Norway Switzerland -0.2 Waste management Waste water management Pollution abatments Protection of biodiversity and landscape R&D environmental protection Source: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Government_expenditure_on_environmental_protection 96 Interpretation of data on the percentage of public expenditure on waste management should take into account the specific conditions of individual countries. Countries which levy a municipal waste management tax could have higher public expenditures as a percentage of GDP when compared to other countries where charges are paid directly by households to service providers and which are not considered as revenues in the budget of local authorities. In such cases, countries with similar waste management costs could show quite different profiles for the proportion of public expenditure allocated to waste management. 97 What a Waste 2.0, World Bank, 2018 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 73 The revenue flows needed to cover system operating, asset (cash basis or full cost accounting); (ii) the sources of replacement and long-term liability costs must be covered investment finance; (iii) the use of grants; (iv) sources almost exclusively out of municipal resources. Defining and of operational funds (primarily user charges, munici- generating the annual revenue necessary to maintain system pal taxes, and municipal and national budget transfers); and financial sustainability on a continuous, reliable and pre- (iv) full or partial cost recovery from users and financial dictable basis is a far more complex and seemingly intrac- sustainability; (v) affordability and measures to protect table issue that must be faced by the municipal authorities. low-income and vulnerable households; (vi) deciding if the principal objective of charging policy is to achieve rev- Financial aspects of municipal waste service addressed in enue stability or waste management objectives. the chapter are: These policy issues relate to a range of guiding and some- ❚ The policy choices to be made in securing investment times conflicting concepts and principles, including the finance and in generating the operational revenues polluter and user-pays principles; the significance of needed to achieve the long-term financial sustainability affordability in defining service scope; the view of waste of the services management as having the characteristics of both a pub- lic and a private good; meeting the objective of full cost ❚ Defining and understanding the significance of the full recovery and the practicality of setting aside funds for costs of the services financing future capital expenditures. ❚ Recognising the opposing constraints of affordabil- Second, a key policy decision is whether to implement a tra- ity and financial viability that determine the scope and ditional charging mechanism with the objective of meeting scale of the services that can realistically be provided on cost recovery and revenue stability objectives or a quanti- a sustainable basis ty-based charging mechanism aimed at giving users incen- ❚ The sources of finance used internationally to fund tives to minimise waste generation and separate their waste for recycling. Selection of a scheme based on the quantity investments in waste management services of waste put out for collection has direct implications for ❚ The annual revenue required to cover the full costs of the design of the waste collection system and its associated municipal waste service and the sources of funds used charging regime. In particular, it calls for a high level of internationally for financing the requirements municipal involvement in waste collection, user charging, fee collection operations and administration. This and other The chapter emphasizes the close interaction and collab- charging options are considered further below. oration that is typically needed between central govern- ment authorities – especially the ministry of finance – and Third, a key policy decision can be whether the services local authorities for ensuring that service objectives are will be provided directly by the municipality or delegated realistic, achievable and financially viable. to private sector operators, and how the related service costs will be financed and charged to households and legal 4.2 Policy choices concerning sector entities. Tariff structures and charging models related to this decision can have a bearing on performance and fee financing collection efficiency. Several key policy decisions must be taken at the national, Fourth, policy may be needed on the kind of support to regional and municipal levels when defining and pre- be given to low-income or vulnerable households. This paring the optimal waste management strategy and its is a crucial area which, unless recognised in advance, associated financing strategy. Many policy decisions are can create significant problems to the effective deliv- reflected in the national or regional Waste Law (or equiv- ery of waste services. Even though waste services may alent) in the respective country or region, but others be affordable to a large majority of households, there is must be determined at the municipal level. Policy can be always a small number of households which need sup- inter-related, with policy decided in one area often influ- port from the State. This should ideally take the form encing the scope of policy in another. of general support provided through a social welfare The first aspect to consider is whether to apply the polluter department (or similar) covering all municipal service pay principle and to what extent. This can cover a wide sectors and not be specific to a single service, such as range of topics, including: (i) the basis for cost assessment waste collection. A register of households supported 74 4 Financing for sustainability and as an incentive through specific measures (such as income support) pro- a primary collection service organized in a semi-formal vided by the municipality is commonly kept. This is con- way through community-based enterprises (CBEs) or sidered further below. Revenue losses arising from the similar and a secondary collection and disposal service non-payment of fees by vulnerable households should provided by the municipality. In these circumstances, not be reflected in the municipal waste management tax householders typically pay a service fee directly to the or charge calculation (i.e., losses should not be trans- ‘informal’ primary collector. A key policy decision faced by ferred to the cost of other users). the municipality is whether it should introduce a separate, formal charge to cover the ‘secondary’ costs it incurs in Fifth, policy may need to be defined on the treatment of providing services beyond primary collection. value added tax (VAT) on waste services. Some countries either exempt or zero-rate waste collection, treatment and disposal services from paying VAT. With VAT rates typi- 4.3 Defining the costs cally ranging from 15-20 percent, this is a significant ben- It is crucial that the municipality and its waste manage- efit to users. Where waste fees do include VAT, public grant ment department knows the full costs of operating its financing or subsidies paid towards municipal waste man- waste management services and the individual compo- agement services should be at least equal to the revenues nents that comprise them. For it to determine its financing paid into the state budget on account of VAT being charged needs, a municipality must first establish the full costs of on waste management activities. its current services, of its planned investments and of the Sixth, policy may be needed on the provision of waste ser- associated operations. Although the largest single expen- vices to legal entities (the CII sector). Some local author- diture is likely to be on infrastructure investment, the ities leave CII waste collection entirely to the private most significant financial challenge almost always relates sector. Others offer services, exploiting economies of con- to estimating the annual revenue requirement and deter- tiguity on domestic services, often competing with pri- mining how it is to be covered. Operating expenditures are vate firms. By operating over a compact area with short almost always higher than the annualised capital costs of distances between collection points municipal operators investments, with estimates showing them to account for have opportunities to offer services at lower rates than 70 percent or more of total budget requirements.98 those provided by private companies focussed solely on Detailed cost estimates are needed for budgeting, defin- commercial waste. Integrating the management of com- ing tariffs, options analysis, strategic planning and for mercial waste into municipal waste management can planning specific investments. Cost analysis is typically contribute towards a municipality’s fixed costs, thereby undertaken over periods of 5, 10 or 15 years for strategic reducing its average costs. planning and program budgeting purposes, and annually Charges levied on legal entities are sometimes set at for accounting and tariff adjustment purposes. rates above the full cost of service with the objective of Both investment and operating costs need to be consid- raising funds to cross-subsidize household services or to ered when preparing cost estimates for strategic planning cover the costs of exempting vulnerable households from and program budgeting purposes. The analysis is usu- payment. Whereas CIIs should be charged the full cost ally conducted over a specified reference period and can of the services provided, they should not face unfair or involve the application of discounted cash flow (DCF) tech- distortionary charges. Support to vulnerable households niques. Some important considerations include: should be provided from municipal sources and not be subsidized by economic entities. ❚ Investment planning accounts for both initial infrastruc- Seventh, it may be necessary to consider policy regarding ture and equipment costs and future investment costs the revenue consequences for the municipality of primary related to asset replacement and long-term liabilities. waste collection being conducted outside the domain of The costs of subsequent landfill cells, plant and equip- the formal local authority service. In many low-income ment replacement, landfill closure and aftercare99are countries, waste collection is ‘informally’ divided between examples. Ibid 98 Properly accounting for future liabilities is a key aspect in the process of calculating the total costs of landfill. Future liabilities include cell replacement 99 and landfill closure and monitoring. Note that including for depreciation and liabilities in the tariff implies setting aside the equivalent amounts of funds in reserve accounts to be drawn upon in the future, including for end of life landfill closure, remediation and monitoring. Accruals accounting of this kind raises profound issues in low and medium-income countries that commonly face extreme current income constraints. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 75 ❚ Cost estimates are needed on an annual basis for the Unit costs calculated this way are indicators of the tariffs respective planning period. Annual costs include for needed to recover the full costs of the waste system under annual depreciation of assets and operation and main- consideration or for each component of the system over tenance (O&M) costs100. the planning period. Typical waste management costs are presented in table 3. ❚ For the purposes of calculating annualised costs, capital investment costs are generally depreciated over periods Table 4 shows that the costs for similar activities range that reflect the typical economic operating lives of the significantly between countries. These variations might be assets. explained by various factors, including the types of waste collection or treatment method applied, the technolo- ❚ Operating costs are calculated for the waste manage- gies used, the differing capacities of the reference instal- ment technologies and operations proposed, usually lations, and local differences in the costs of labour, fuel, divided by component type and facility, and cost item consumables and works, or tax policies and other factors. (e.g. maintenance and repair, labour, consumables, Costs can also vary significantly within a country, even administration, taxes). though the services may be similar and provided under ❚ Costs should also be calculated separately for each similar conditions. Reasons why levels of service delivery efficiency differ between operators and local authorities waste management activity (e.g. mixed waste collection, are the varying levels of equipment utilization, equipment separate collection, sorting, treatment and disposal). operating below planned capacities and poor planning. ❚ DCF analysis is used to calculate and compare the unit Lack of competition on the local market, sub-optimal pro- costs per tonne of waste for each option being examined curement and contracting methods and risk allocation can and for the individual components of each option. These also have significant local impacts on costs. For example, experience from in-country situation analyses reveals the are calculated for each cost category and for each ser- potential for achieving reductions in collection and trans- vice area. Average unit costs of this kind provide pow- port costs by optimizing service efficiency; at the same erful financial information about the various system time, it is common to find disposal costs set below their components and for the overall system. estimated values owing to inadequate levels of operations The cost analysis enables the annual revenue needed to and maintenance practices. recover the full costs of the collection, transport, recov- When preparing cost estimates it should be remembered ery and disposal systems to be estimated (in total and by that a solution based on low investment costs does not component). That is, the revenue required to cover opera- always lead to low service costs when considered over the tional costs, investment costs (return of capital) and profit entire period of the plan or contract. (return on capital). Practice also shows that actual outturn service costs This enables the full cost of service per tonne of waste gen- often differ considerably from initial cost estimates. Cost erated and/or collected and per person to be determined. determination can suffer in both directions, resulting in Table 3 Typical waste management expenditures by type of activity, USD/tonne Low-income Lower-middle-income Upper-middle-income High-income Operation countries countries countries countries Collection and transfer 20 – 50 30 – 75 50 – 100 90 – 200 Controlled landfill to sanitary landfill 10 – 20 15 – 40 20 – 65 40 – 100 Open dumping 2–8 3 – 10 – – Composting 5 – 30 10 – 40 20 – 75 35 – 90 Source: What a Waste 2.0, World Bank, 2018 100 Note that it is necessary to carefully distinguish between investment costs and depreciation when undertaking DCF analysis. 76 4 Financing for sustainability and as an incentive Table 4 Capital and operating expenditures of incineration and anaerobic digestion, USD/tonne Incineration Anaerobic digestion Capital expenditures a Operational expenditures Capital expenditures Operational expenditures (US$/annual tonne) (US$/tonne)b,c (US$/annual tonne) (US$/tonne) Europe $600–1000 $25–30 $345–600 $31–57 United States $600–830 ¢44–55 ¢220–660 ¢22–55 China $190–400 $12–22 $325 $25 Source: Kaza and Bhada-Tata 2018. Note: MWh = megawatt hour of energy a. In Europe and the United States, predominantly mass-burn/moving grate technology is used for waste incinerator with energy recovery (waste-to- energy). In China, many incinerators use circulating fluidized bed (CFB) technology, which reflects the lower end of investment cost, although moving grate incinerators are also becoming more common. b. Operating costs without accounting for revenues range between $100–200/tonne. The figures presented in the table are typical operating costs (net gate fees) taking into account revenues for electricity and heat sales and other revenues. In Europe, also including subsidies to energy from waste in some countries, these revenues are typically about $100/tonne, hence the resulting operating costs. In the United States, fee-in tariffs for electricity are typically lower, below $50/MWh. c. Mixed e=waste in the United States and Europe is relatively low in organics and water content hence high in caloric value. As a consequence, operating costs for waste with high organics often seen in lower-income countries could substantially increase operating costs due to lower revenues. Source: What a Waste 2.0, World Bank, 2018 over- and under-estimation. In this regard, preparing reli- Willingness-to-pay can be assessed using a variety of able cost estimates and achieving a good understanding of research techniques, but the approach mostly used in the actual costs of service delivery is of crucial importance the municipal waste sector is the ‘contingent valuation’ to the local authorities responsible for deciding upon, method, whereby survey and questionnaire-based tools implementing and providing waste management services. are used to assess the willingness to pay by residents of a community for improved service levels. Face-to-face 4.4 Willingness-to-pay survey methods can be an effective and accurate way of gauging the willingness of a community to pay for a spe- An important factor typically examined by a municipal- cific proposal or for comparing and ranking alternative ity when proposing to introduce new or expanded waste proposals. management services, especially if household waste tar- iffs will be affected, is the concept of users’ willingness to Perceptions of service quality crucially influence WTP. pay (WTP). Consideration of WTP usually forms part of the Households are typically only willing to pay more if they public awareness raising and communications activities recognise and understand the benefits of improvements undertaken during the development phase of a project. in the nature, quality and scope of services offered. A key The concept is important not only because it encompasses constraint that has typically to be addressed when propos- users’ concerns over affordability101 but because it also ing higher tariffs are low levels of satisfaction with cur- takes account of users’ perceptions of the value (benefits) rent services and poorly defined tariff setting processes. If of the proposed measures and of the capacity and likeli- households are unaware of the agency that is billing them hood of the municipality being able to implement them. or the purposes to which their fees are being put, then they are likely to have a low willingness to pay for new The willingness to pay for a service reflects the economic services (even if they are affordable). value an individual attaches to the service (the perceived level of satisfaction he derives from it). ‘Willingness’ encom- Whereas households are likely to be concerned most about passes both the ‘ability’ and the ‘desire’ of the user to pay their immediate environment (e.g. keeping the streets and for the service. Willingness-to-pay is thus a wider and argu- local environment clean) many of the benefits of waste ably a more informative concept than affordability alone. management – efficient sanitary landfill or treatment – are Waste Management Costs & Financing and Options for Cost Recovery; Horizon 2020: a cleaner Mediterranean by 2020, Jean-Jacques Dohogne, August 101 2014 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 77 indirect. WTP techniques can capture both these aspects waste services in the Czech Republic is established by (direct benefits to individuals and wider indirect benefits central government to be 0.7 percent of average house- to the community) but the analysis must be conducted as hold income. In Romania, services should not exceed 1.5 part of a wider public awareness raising and communica- percent of the income of the poorest households, defined tions campaign. according to the income of three lowest income decile groups. In Bulgaria, the adopted affordability threshold is By keeping households informed of the changes proposed 1 percent of average household income. In Morocco, user to be made to their waste management services, of why charges are levied as part of the municipal service tax that the changes are needed and how tariffs will be affected, covers waste and other municipal services. The amount of municipal public awareness raising and communications the tax is calculated based on the property value leased or campaigns can be vitally important for influencing house- owned by each household. As the tax is not correlated to holds’ willingness-to-pay102 for expanded services. the cost of service, affordability cannot be directly calcu- Even so, awareness raising and communications cam- lated. However, estimates based on the income of house- paigns alone may not be sufficient to influence the percep- holds in the first decile, show that the municipal service tions of many households. In these circumstances it may tax does not exceed 1 percent of the income of the poorest be necessary to implement medium-scale pilot demon- households. In India, there is no formally defined afford- stration projects in tandem with the campaigns in order ability threshold and the affordability level varies from to change households’ perceptions and raise their willing- state to state, and even across cities, depending on vary- ness to pay. ing range of incomes levels and economic growth. Local authorities conduct their own affordability analysis prior 4.5 Affordability and financial to establishing user charges for various categories of waste generators. sustainability criteria When conducting an affordability analysis, the competent Pre-requisites for a successful waste management ser- authorities first establish a ceiling on the size of tariffs vice are its affordability and financial viability throughout relative to average household income (the affordability the planning period. Affordability relates to households’ ratio). Reliable data are then needed on average household ability to pay for waste services. Financial sustainability incomes in the waste management area, and on projected means always having some cash in the bank: having a pos- real growth in those incomes over the planning period. itive cumulative cash flow in every year. These constraints From this, the indicative size of the maximum tariff can be are essentially in conflict: the affordability constraint calculated for each year of the planning period. This infor- brings pressure to keep tariffs low while the financial sus- mation enables a transitional period to be defined over tainability constraint brings pressure to make them higher. which (low) current tariffs can be progressively adjusted A measure of affordability is given by the affordability until the affordable level is reached. Other rules might also ratio: the share of average monthly household income that be set, such as that tariffs should not be increased annu- households might realistically spend on municipal solid ally by more than a specified rate or that tariffs should not waste services. A ratio of 1 percent of average household exceed the full cost recovery tariff. Under such an arrange- income is commonly used, although some countries use ment, other funding mechanisms, such as direct municipal lower ratios. Additional policy responses are often needed transfers, will be needed until the tariff gap is closed. to protect the very poor or vulnerable from unaffordable Decisions on affordability policy take account of the dif- charges, such as specifically targeted subsidiesor payment ferences in incomes and affordability of the highest and exemptions. As indicated, support measures should ide- lowest income deciles, which can vary considerably ally be put in place by the municipality that all municipal between countries, regions and municipalities. Note that service sectors and not be specific to a single service, such average household income is usually calculated as the as waste collection. mean (total household income divided by total number of The concept of an ‘affordability threshold’ can be help- households). This is not always appropriate in countries ful in designing and implementing affordable systems. with high levels of income inequality as it tends to set For example, the affordability threshold for municipal the average disproportionately high. In this case it can A guide for local government in South Africa, Namibia and Botswana, Transparent Tariffs Toolkit, (Communicating Tariffs & Setting Tariffs), Published 102 by www.skl.se, www.salga.org.za, www.alan.org.na, www.bala.org.bw, 2012 78 4 Financing for sustainability and as an incentive be better to use the median measure of average income to four different property categories: ‘property under con- (the level at which there are as many households below struction’, ‘residential property’, ‘commercial property’ and it as there are above it). ‘other commercial’ (industry, hotels, supermarkets). Taxes are progressive, with ‘under construction’ properties being In most high-income countries, waste management costs assessed at the lowest tax rate and ‘other commercial’ at the are well-below the 1 percent threshold for the share of highest rate.107 In Chile, local authorities charge residents household income at which full cost recovery103 tariffs are a waste fee based on both the fixed and variable cost com- considered affordable. The affordability criteria have far ponents of the service. Low-income households in dwell- greater relevance and influence on policy decisions in low- ings having a tax assessment below a given threshold are and middle-income countries where the full cost recovery automatically exempt from payment, resulting in revenues objective can be difficult to achieve. In such countries, tar- being collected from only some 20 percent of households108. iffs equivalent to 1 percent of household income might only partially cover the costs of collection and safe disposal of The financial sustainability constraint refers to the tar- waste, whereas the future extension of services or the iff needed to generate the minimum amount of revenue implementation of more advanced and costly treatment needed annually to sustain the waste system and relates methods would make services unaffordable. For example, directly to the costs of the service. If tariffs calculated in Vietnam, increasing fees to 1.5 percent of household according to the financial sustainability constraint are income would cover a maximum of only two-thirds of the higher than those calculated according to the affordabil- costs of a basic service composed of full waste collection ity constraint, then – depending on the size of the gap and sanitary disposal to landfill. Adding treatment facili- between them – one of the following three scenarios might ties would reduce the proportion of costs covered by the need to be considered: tariff to one third104. ❚ If the gap is small and occurs in the early years of the Measures to address service affordability are relevant to planning period, then it may be possible to progressively low-income households and especially to those in rural phase in the tariff until the gap is closed. Additional areas. In many countries low-income households are either municipal funding sources would be required until that exempted from payment of service tariffs or other compen- point is reached. satory mechanisms apply. For example, in South Africa, the National Policy for the Provision of Basic Refuse Removal ❚ If the gap occurs across the planning period, then either Services to Indigent Households105 aims to address the the scope and scale of the proposed system must be basic service backlog amongst poor households, partic- scaled back so that the costs of the revised system fall ularly those essential services such as refuse removal106. to an affordable level, or It incorporates basic solid waste services into a bundle of basic free services, endorsing the right to access solid ❚ Additional policy measures will be needed so that the waste services for those who cannot afford it. In Tajikistan, charges become affordable. These might include financing waste fees for low-income households, disabled people and part or all of the investment from grants or by introducing war veterans are paid from the central budget and the list municipal transfer payments to subsidise the tariffs. of households eligible for receiving state aid is provided Affordability, financial sustainability and grant fund avail- annually. In another example, from Brazil, the most com- ability determine the scope, scale and timing of imple- mon form of waste management charge is a graduated fee menting a realistic and achievable waste management linked to the property tax. A feature of the mechanism is a strategy. Careful consideration of these factors can allow differentiated assessment defined by categories of property realistic targets to be set for achieving specific waste and use. An example from a medium-sized municipality in management goals. Responsible authorities with ‘policy Minas Gerais applies four different tax categories according 103 The full cost recovery revenue requirement refers to the funds needed annually over the reference period for the waste management system to be operated on a fully commercially sustainable basis. It can be influenced by the extent to which grants are used in the investment financing mix. 104 Solid and Industrial Hazardous Waste Management Assessment, Options and Action Area to Implement the National Strategy, World Bank, 2018 105 National Policy for the Provision of Basic Refuse Removal Services to Indigent Households, Gazette No. 34385, Notice 413, Department of Environmental Affairs, South Africa, 2011 106 2nd South Africa Environment Outlook (SAEO), Chapter 13, 2016, available at https://www.environment.gov.za/sites/default/files/reports/ environmentoutlook_executivesummary.pdf 107 ‘Relatório Municipal de Coleta Seletiva do Município de São Lourenço’ GESOIS, FEAM, 2020 108 Environmental Performance Reviews: Chile 2016, OECD, 2016 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 79 maker’ and ‘planner’ roles must define (i) the bounds of a International practice shows that if socially affordable and politically acceptable tariff and its structure; (ii) how the minimum annual revenue require- full cost recovery tariffs are not in ment is to be calculated (thus defining the full cost recov- place and if municipalities have only ery tariff); and (iii) the sources and availability of grant limited financial capacity then the funds and the conditions under which they can be used. development of waste treatment and disposal infrastructure based entirely on 4.6 Financing of investments investment by local authorities either The waste management plan should indicate how the faces considerable delay or does not investments needed to implement it are to be funded. proceed. Sources of investment finance can include (i) municipal capital reserves; (ii) national and/or regional government municipal investment programs financed out of the local capital transfers (grants); (iii) specific national govern- budget or from the financial reserves (own funds) held by ment funds created to support the achievement of waste public utility companies providing waste management management or wider environmental objectives; (iv) com- services. The availability of investment finance of this kind mercial loans from local banks; (v) bilateral international depends entirely on the financial capacity of the respec- grants; (vi) grants and/or loans from international financ- tive authority and the availability of adequate funds in the ing institutions. municipal budget. Whether funds from a particular source can be accessed Direct investment by local authorities is more common in practice depends on the conditions set by the relevant when making relatively small investments, such as to pur- funding agency and on whether the municipality/applicant chase waste collection containers and equipment or to can satisfy those conditions. An application for investment establish civic amenity sites, than it is for investments in funding should be supported by an investment feasibility large-scale projects, such as landfills or treatment plants. study or business plan setting out the information, data It is usually only in the larger cities that local authorities and analysis needed to demonstrate the viability of the might have the capacity to rely solely on their own funding investment for which the funds are being sought. sources for implementing such large-scale investments. This should include an investment financing plan show- Direct funding of such projects remains out of the reach of ing investment requirements and costs over the planning most smaller local authorities. period and the sources of funds proposed for financing International practice shows that if full cost recovery tar- them. It should indicate which funding sources (includ- iffs are not in place and if municipalities have only limited ing user charges) are proposed to cover operational costs financial capacity then the development of waste treat- and future liabilities, such as debt service obligations ment and disposal infrastructure based entirely on invest- and future investment costs (e.g. equipment replacement, ment by local authorities either faces considerable delay landfill cell closure and aftercare, opening new landfill or does not proceed. Practice also shows that financially cells). Details of the tariff analysis undertaken to calcu- constrained local authorities might decide to invest in and late user charges, and the results of affordability analyses, build part of a project, such as a landfill cell, whilst leav- should also be included. ing other vital infrastructure, such as leachate treatment, It can be assumed that as a pre-requisite for investing cap- for a second stage of investment once additional funding ital IFIs and private sector companies will require assur- becomes available. This is a highly undesirable situation ances and guarantees that an effective cost recovery and that should be avoided. charging system is in place and that alternative mecha- Investments from private sector nisms are available for ensuring that loans will be serviced and contracts honoured. In the absence of adequate financing capacity, an option is for a local authority to draw upon the resources of private Investments financed entirely by local authorities sector waste management companies. Private sector firms Local authorities’ primary responsibility for the delivery of have the potential to mobilise investment funds as equity waste management services includes provision of the nec- finance from their own retained earnings as well as from essary collection, treatment and disposal all infrastruc- having access to debt finance from commercial banks. ture. Investment at the local level might be funded from However, private sector firms will only invest in waste 80 4 Financing for sustainability and as an incentive management facilities if the prospective returns on their the focus is on large infrastructure projects or on projects investments are realistic and achievable. Achievement dealing with the closure of non-compliant facilities and of this requirement depends fundamentally on tariff and remediating past environmental damages. charging policy, fee collection efficiency and the reliability For example, in Morocco, a central government program and predictability of waste fee revenue streams. - PDNA (see Chapter 3) has introduced a subsidy scheme International private sector waste management compa- supporting both investment and operation for the mod- nies may be interested in financing or co-financing invest- ernization of municipal waste management systems. ments in waste management equipment and facilities. The Typically, the PDNA has financed investment costs in full type of involvement can take several forms: sole owner- and up to 30 percent of operating costs. The support lasts ship of assets and provider of waste management services for a maximum of 5 years, by which time local authori- to a specific area; in partnership with a local private sec- ties are expected to have expanded their own sources of tor service provider; or in partnership with a local public revenue. sector company. International companies will demand at a minimum the same assurances and guarantees as IFIs Similarly, in the Republic of Korea, government fund- regarding the financial viability of the proposed waste ing is extended to certain types of waste treatment facil- management schemes and the creditworthiness of the ities, including incinerators, landfills, bio-gasification municipality and will expect to make a profit on its involve- plants, material recovery facilities and food waste treat- ment consistent with market expectations. ment installations. In the case of the Seoul incinerator, the national government provided financial support to 30 The requirements for successful private sector involve- percent of the capital cost, the provincial government pro- ment are considered in Chapter 5. vided a further 30 percent, and the balance was funded Investments financed by a combination of local authority by municipal governments. National and provincial gov- and central/regional funds ernment support is available only when municipal govern- ments construct facilities for use jointly with other local Many countries provide support for investments in waste authorities. If a waste treatment facility is needed but collection, treatment and disposal through centralized the municipal government is unable to make the neces- financing organized at the national or regional levels. The sary contribution towards the investment, the opportunity usual source of grant financing for such projects is the exists to involve private enterprises in the financing. In central budget and can be in the form of direct budget- this case, the national government and the provincial gov- ary transfers to local authorities for specific projects or ernment each cover 50 percent of the initial investment can be implemented via designated national investment cost not funded by the private enterprise. The munici- programs. With high levels of political commitment and pal government pays off the amount invested by the pri- support, the amounts of such public investment in waste vate enterprise via the tipping fee. See Box 9 on spread of treatment infrastructure can be significant, bringing about expenditures between tiers of government. rapid development and improvements of the sector. The sources and availability of national grant funds, and This type of financing may cover initial investment costs the conditions under which they are to be used, should entirely or may require a capital contribution from the be determined at an early stage of the planning process beneficiary local authority. This can be a barrier to a local (see Box 10). Clear rules are needed to define the specific authority as it may lead to a breach of the local author- waste management sub-sectors (activities) to which grant ity borrowing limits or other financing rules established by funds will be allocated. This factor is decisive if private the ministry of finance. sector involvement is being sought in the provision of spe- Investments financed by central sources cover various cific sub-sectors of municipal waste management. In par- types of equipment purchases and facilities. In some ticular, it is essential to avoid grant-funded public services countries, government programs focus on the purchase of competing directly with commercially funded private ser- waste collection vehicles and containers while in others vices operating in the same sub-sector. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 81 Box 9 Expenditure on waste management by tier of government in the Republic of Korea In the Republic of Korea, national government’s expendi- Provincial governments’ spending on waste management ture on waste management includes support to local author- include support to local authorities, construction and opera- ities, support to resource recycling projects, research and tion of provincial facilities, research and development, stra- development, strategic planning and public relations. The tegic planning, and public relations. The sources of income source of income is mostly environmental improvement spe- are financial supports from national government, tipping fees cial accounting and national tax. Special accounts for envi- collected from waste disposal facilities, and local taxes. ronmental improvement are created for the purpose of being Local authorities finance the operation of waste collection and used in all environmental fields; the resources used for waste transport, manpower and equipment, installation and opera- management are mostly waste charges for difficult to recy- tion of waste treatment facilities, building a discharger fee cle products of the recycling obligation producers who have system, and education and promotion. The sources of income failed to achieve the government’s recycling target, waste are mainly the collection of discharger fees for mixed waste, disposal charges for incinerated and landfilled waste, and food and waste, large-sized waste, tipping fee of waste treat- post-management deposits for the waste treatment industry. ment facilities and sales of recycled products. Box 10 Decision rules for balancing affordability with financial sustainability Affordable tariff policy tends to push tariffs down and finan- ❚ Defining the minimum revenue needed each year to achieve cial sustainability tariff policy tends to pull tariffs up.109 The system financial sustainability. They help define the tariffs tensions inherent in these policy goals feed back into system needed to satisfy this constraint. financing and, ultimately, into how the scope of the waste Example Decision Rules for Social Affordability: management system is defined and its costs. If a funding gap exists between the revenue needed to meet the finan- ❚ Define the average household income and income projec- cial sustainability constraint and the revenue which can real- tions to be used in the analysis istically be generated under the affordability constraint, ❚ Define an affordability ratio to establish a ceiling on tariffs then grant funding may be needed to fill the revenue gap relative to average household income between the affordable and the full cost recovery tariff paths. ❚ Define an appropriate starting tariff for tariff evolution Alternatively, it might be necessary to reconsider the project ❚ Define a realistic period over which the affordable tariff is scope, scale and costs. to be achieved, and/or Implicit in the concept of the funding gap is that the proposed ❚ Define the maximum permissible annual real rate of service is currently unaffordable. Implicit in the decision to increase in tariffs use grants to bridge the funding gap is the expectation that ❚ Define the correct treatment of VAT the services will become progressively more affordable over ❚ Tariffs should not exceed the level appropriate to the time; that is, per capita incomes are projected to grow in real affordability ratio terms. Taking this assumption into account, the aim is to find ❚ Tariffs should not exceed the full cost recovery tariff a tariff and financing structure that enables both tariff con- straints to be met. Decision rules can be set to help achieve Example Decision Rules for Financial Sustainability: this aim by: ❚ Grants to be used to achieve the long-term financial viabil- ❚ Defining the input parameters needed to establish house- ity of the strategy whilst keeping tariffs affordable hold waste tariffs that are socially affordable and accept- ❚ Grants to be used once only to co-fund initial investment able. They help define an affordable revenue stream. requirements Text based on Faircloth, P. & Doychinov, N, Full Cost Recovery and Affordability in the Household Waste Management Service Sector, Ukraine, Case Study 109 from Lugansk Oblast, South-West Sub-Region, Presented to Ukraine Communal Services Regulatory Commission, 2012 82 4 Financing for sustainability and as an incentive Box 10 Cont. ❚ Replacement assets to be funded from retained earnings or ❚ Cumulative net cash flow to be positive in all years loans or private sector contributions If real household incomes are not projected to rise then ❚ Tariffs to cover – at a minimum – O&M costs in full from the either alternative municipal financing sources and mecha- start of operations nisms must be identified and put in place for funding future ❚ Tariffs to cover 100 percent of depreciation on all replaced asset replacements and other liabilities or the proposed ser- assets vices should be scaled back to a level at which they are both ❚ Tariffs to cover a progressively increasing share of depreci- affordable and financially sustainable in the current financial ation on initial assets circumstances. Special purpose governmental or regional funds those for waste management. Various regulations and programs govern the provision of grants or loans from EIC State financing for waste management investment proj- to a range of actors, including municipalities, NGOs and ects is commonly channelled through the special central or private entities. The financing is split into subprograms, regional funds that have been established in many coun- one related to waste management and the circular econ- tries110. National Environmental Funds (NEFs), pollution omy, where investments support capital and occasionally abatement funds, regional development funds and sim- operational costs. Each such sub-program has detailed ilar are typically government funds created by national conditions and rules for application, approval, contract- law, controlled by government and financed primar- ing, and implementation monitoring of eligible projects. ily through public sources of revenue (domestic budget These funds have been critical to solving numerous waste and ear-marked taxes)111. Usually, the NEFs have broader management problems, such as closure of landfills, re-cul- objectives related to various elements of environmental tivation of old landfills, clean-up of contaminated sites, protection, and waste management is only part of their and infrastructure development that includes landfills, activities. sorting centres and local public amenity sites. Financing Each NEF operates under specific rules defining the scope has also supported recycling projects developed by pri- of activities, decision making processes, eligible expendi- vate companies as well as the provision of additional recy- tures, project identification and application procedures, cling capacity. rules for contracting of services, equipment supplies and In Brazil, specialised financial institutions serve as con- works, mechanisms for project implementation and moni- duits for federal resources to both states and municipali- toring and performance indicators. Fund financing can be ties. Two important lines of federally supported resources provided for specific projects or for large investment pro- are the National Environmental Fund, coordinated by the grams composed of multiple projects of similar type and Ministry of Environment, and Caixa Economica Federal – purpose. Considering that NEFs are usually established a public bank dedicated to financing environmental infra- under national authorities responsible for environmen- structure. Both are designed to support waste management tal protection it can be assumed that financing priorities and recycling projects112. Brazil’s National Development are well coordinated with the relevant waste management Bank (BNDES) is another leading financial institution sup- strategies and plans. porting the national development agenda. In the waste For example, in Estonia the Environmental Investment sector it supports the construction of sanitary landfills. Center (EIC) uses revenue from environmental taxes and Since 2018 the Inter-American Development Bank and EU grant financing to fund investment projects, including BNDES have established a partnership to create a pipeline 110 Recently more than 200 specialized governmental funds operate worldwide in the field of environmental protection, pollution abatement, climate change, energy efficiency, biodiversity and forestry. 111 Moye, M., Innovative Mechanisms to Manage Environmental Expenditures in Africa, Asia and Latin America and the Caribbean (LAC), WWF Center for Conservation Finance, Conference on Financing the Environmental Dimension of Sustainable Development, OECD, 2002. 112 ‘Gestion de residuos sólidos en Brasil’ Ficha Sector Brasil, España Exportación e Inversiones (ICEX), 2018. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 83 of municipal waste investments in several states focused US$2 billion, states and Union Territories contribution is on the closure of dumpsites, the construction of sanitary estimated to be a minimum of US$660 million with the landfills and the development of resource recovery sys- remainder to be financed by private entities, market bor- tems 113. rowings, and user charges. Another example is the Government of India’s flagship Potential international sources program ‘Swachh Bharat Mission’ (Clean India Mission) Within recent decades achieving greater sustainability initiated in 2014 that provides national as well as state in the waste management sector has become a priority level grants for achieving universal sanitation coverage for IFI funding within their broader environmental, cli- in urban areas (till recently focused mostly on sewerage). mate change and circular economy policies. See Box 11 on The program has an estimated cost of US$8.4 billion114, investments by the World Bank in waste management. of which the central government share is approximately 113 ‘BNDES financiará com R$ 34 mi centrais de tratamento de resíduos sólidos urbanos do Rio Grande do Sul’ BNDES, January 4, 2019. See https://www. bndes.gov.br/wps/portal/site/home/imprensa/noticias/conteudo/bndes-financiara-com-r34-mi-centrais-de-tratamento-de-residuos-solidos-urbanos- do-rio-grande-do-sul 114 SBM-Urban Government of India, Centre for Policy Initiative, conversion rate used 74 INR/$US Box 11 World Bank support to waste management The World Bank has been supporting the waste management and financial capacity, in addition to meeting increasing sector for decades. Since 2014, the World Bank has commit- demand for infrastructure facilities, recycling and compost- ted US$2.3 billion in waste management investments across ing systems. World Bank projects also coordinate between 81 projects in all regions. Most commitments, totaling US$1.7 local governments to achieve economies of scale, help clients billion are in East Asia, Africa, and South Asia, which are also select and oversee service providers and facilitate partner- the fastest growing regions in terms of waste generation115. ships with the private capital. At a community level, it is typ- ical for the World Bank engagements to include local citizen The waste management sector has changed significantly in recent years and generated waste is projected to increase engagement and education components, aide social inclusion with 73 percent by 2050 over 2020116. Waste composition has amongst both laborers and beneficiaries. The adequacy of evolved with changing consumption patterns, and the envi- solid waste management services can heavily influence trust ronmental impact of mismanaged waste including plastics has for local officials and in turn, government capacity. In addi- become especially salient. As the waste burden grows, the need tion to providing capital and technical insight, World Bank and demand for waste management support have increased. projects routinely help municipal governments manage local The World Bank’s engagements have changed accordingly in issues from strategic planning, to institutional coordination, conceptual framework. Projects have a growing emphasis on to budgeting. national sector development programs that include national Looking ahead, as the role of waste management in sustain- policy development and support to multiple cities. ability, poverty, climate change, and local economic develop- Many World Bank projects focus on putting in place waste ment will grow due to pressures from urbanization and waste management systems with adequate household and busi- generation, demand for funding, technical know-how and ness waste collection, strong monitoring and enforcement, capacity building is expected to continue to increase. Kaza, S., Shrikanth S. and Chaudhary, S., More Growth Less Garbage, World Bank, 2020 and What a Waste 2.0, World Bank, 2018 115 Ibid (Note that as of July 15, 2021, the waste generation estimates have been updated with the final publication on More Growth, Less Garbage). 116 84 4 Financing for sustainability and as an incentive Significant amounts of finance are also provided by inter- expected that the sustainability – financial and other- national donors on a bilateral basis. wise – of the proposed waste management services will be examined rigorously, as will the affordability of the pro- International financing takes the form of long-term loans posed tariffs charged to waste generators and the willing- and grants depending on the general policies of the ness of waste generators to pay the proposed charges. respective IFI, the specific needs and conditions in the beneficiary country and the expected results and impacts. The potential use of international financing in the devel- Applying for international loans requires coordination and opment of the waste management sector should be exam- support at national level as state guarantees are usually ined carefully by the competent national authorities. required as a condition for providing the finance. Cooperation with IFIs should be considered not only with respect to possible financing but also as an opportunity to The issuing of such loans usually follows the preparation gain access to new and advanced approaches and technol- of a feasibility study and a comprehensive analysis and ogies and to gain from international experience in mod- assessment of the technical, economic, financial, envi- ernizing the sector. See Box 12 on support by the World ronmental and social aspects of a scheme. It should be Bank to Indonesia. Box 12 Indonesia - Improvement of solid waste management to support regional and metropolitan cities The Government of Indonesia is partnering with the World the implementation, construction supervision consultants, Bank to improve solid waste management services for urban monitoring and evaluation, and specific technical assistance populations in selected cities across Indonesia. To that aim, for cities and district governments receiving the investment a US$100 million loan has been provided and is expected to of component 3. leverage additional financing by improving the enabling envi- The project is expected to create a nation-wide, scalable plat- ronment and capacities on the ground. form for improving solid waste management performance The project comprises of four components. The first com- that is adaptable for a variety of different urban contexts in ponent, institutional and policy development, will support Indonesia. It comprehensively supports solid waste man- institutional strengthening and capacity building of cen- agement policy and legislation, financial sustainability, and tral government agencies responsible for various technical stakeholder collaboration across all aspects of the sector (col- and administrative aspects of solid waste management ser- lection, treatment, disposal, recycling and waste generation); vices. The second component, integrated planning support and is designed to support the implementation of existing and capacity building for local government and communities, sectoral programs, including MPWH’s Acceleration of Urban will finance the costs of experts and community facilitators Sanitation Development Program (Percepatan Pembangunan throughout the program cycle to support capacity building Sanitasi Permukiman) and Ministry of Environment and (including longer-term management support, training, work- Forestry’s Solid Waste Management Roadmap to 2025. shops, and knowledge exchange events between cities as well as urban sub-districts) of local governments and communities Although the project represents a small portion of the US$ to design and manage solid waste service improvements. The 5 billion overall estimated sector investment needs over third component, solid waste infrastructure in selected cities, the next six-year period, it is designed to provide a strong consists of two sub-components: (i) support for integrated foundation for future expansion when additional financing solid waste management systems for Citarum watershed cit- sources are available. The World Bank’s value-added propo- ies; and (ii) support for integrated solid waste management sition in this program is to strengthen the outcomes of exist- systems in selected cities, other than Citarum watershed cit- ing government funding in solid waste management through ies. The fourth component, implementation support and tech- technical expertise, global knowledge, and strong gover- nical assistance, finances the program management during nance controls for the Indonesian context. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 85 4.7 Operational financing and ‘If such an approach [i.e. a combination of property rates and user charges] is adopted it should be formalised, i.e. an explicit operational revenues proportion of the rates revenue should be set aside for solid 4.7.1 Cost recovery policy waste services based on a well presented indication of the costs of public waste management services. At present this combined To be confident that services are appropriate in terms of approach is applied by many municipalities on an ad hoc basis their scope and scale, are affordable to users and financially as the general rates account is used to subsidise any deficit viable over the longer-term, municipal officials must under- accruing on the solid waste account. This approach, where any stand the implications of the full costs of providing those deficit (whether coming from public or private services or sim- services. This means recognising future costs in advance, ply from poor management) is automatically funded out of the such as collection vehicle and waste treatment equipment rates account, provides no efficiency incentives and should not replacement, construction of new landfill cells and lon- be regarded as an acceptable tariff structure.’ ger-term liabilities, such as landfill closure and remediation costs117. This implies a degree of commercial management, The principal sources of recurrent funding are user charges based on the principles of full cost (accruals) accounting, and transfers from municipal budgets. Others include that is often absent from municipal waste management national and regional government transfers; receipts from planning departments, especially those in less well-re- the sale of recycled materials and compost, generating sourced municipalities. This understanding, though, is cru- energy from waste; taxes paid on consumer goods such as cial to developing a viable cost recovery policy. plastic bags and batteries; funds raised from extended pro- ducer responsibility (EPR) schemes; and levying licensing Cost recovery policy aims to create a system of direct, regu- fees on waste operators. Funds realised through these com- lar and reliable revenue receipts that allows the services to bined sources must be predictable and sufficient to meet be planned, managed and budgeted on a sustainable basis. the cost recovery objectives. The key element is predictability: the predictability of the revenue stream needed for financial sustainability118. Cost Of these sources, only user charges and municipal transfers recovery does not mean that all costs must be recovered are likely to be sufficiently predictable for system and finan- directly from users. It means that funding sources must be cial planning purposes. National and regional transfers are in place to cover all system costs now and in the future. unpredictable and should be used only as a temporary mea- sure until more reliable sources are phased in. Recyclable Most countries have introduced either ear-marked munic- materials markets and EPR schemes are potential sources ipal taxes or charges for funding the operational costs of of revenue but ones which typically have still to be devel- municipal waste services provided to households and other oped and proven. waste generators, and quite commonly they are a mix of the two. Typically, though, the cost recovery process is defined The purpose of cost recovery analysis is to establish the amount of revenue needed each year to ensure the long- without an underlying policy base or objectives. A common term viability of the waste management services. From this example is for tariffs to be set to generate sufficient revenue the affordability of the services to users can be gauged. The to cover a specific funding objective (for example, to cover proportion of this revenue requirement to be provided by the direct cash operating expenditures) and for all other users through the payment of tariffs depends on the over- costs to be covered on an ad hoc basis from the municipal all policy objectives established by the national or munic- budget. ipal government. The part of the revenue requirement not This general situation was remarked upon in the Municipal funded through tariffs must be financed by the municipality Solid Waste Tariff Strategy published by the South African from other sources (if the operations are to be managed on Department of Environmental Affairs in May 2012 as follows: a financially sustainable basis). 117 In many countries with advanced waste management legislation, a condition of the permit to operate a landfill is that adequate financial provision must be available to provide a guarantee that the costs of remediation, site closure and post-closure liabilities are not borne by the community in the event that the operator abandons the site, becomes insolvent or incurs clean-up costs beyond its financial capacity. The financial provision covers (i) costs arising from uncertain incidents specified in permit conditions; (ii) landfill closure costs; and (iii) landfill aftercare costs. Obligations on the landfill operator typically continue beyond landfill closure: financial provision must generally be in place for at least 30 years following landfill closure. Closure and post-closure cost estimates are to be prepared prior to commencement of facility operations. The total financial provision is to be accrued over a landfill’s operating life. The adequacy of the provision is to be kept under continual review and is to be adjusted annually as necessary until all post-closure monitoring and maintenance has ceased. 118 Financial sustainability is taken to mean that cumulative net cash flow after all cash expenditures is greater than zero in all years of the operational life of the waste management system. 86 4 Financing for sustainability and as an incentive Cost recovery policy needs to establish two things: the total aside in such an account if they have been raised from users amount of funds needed each year of the planning period and are incremental than if they simply involve an internal and how these funds are to be provided. The minimum transfer within a municipality’s accounting department. amount of recurrent funding is that needed to finance the A mix of user charges and municipal transfers can however direct operating expenditures and debt service obligations be useful as a transitional arrangement between a situation incurred in providing the service. That is, sufficient to cover of there being no charges to one of full cost recovery. In this annual operating cash outflows. If, on the other hand, the way charges can progressively be introduced to the afford- financial objective is for the agency to become self-sustain- able level. A similar situation arises if initial investment ing over time, then the annual funding requirement should be sufficient also to recover capital expenditures, long-term costs are financed by grants but must be refinanced by debt liabilities and possibly to provide a return on investment. when they come to be replaced. Here the possibility exists to progressively increase the tariff over the life of the grant- Setting waste charges to recover operational expenses funded asset until the year in which it comes to be replaced. only, however desirable from a social perspective, can jeop- This will enable some of the funds needed to finance its ardise the chances of the basic service becoming sustain- replacement to be generated in advance and thereby avoid- able in the longer term or of privatising all or parts of it in ing the need for a steep increase in tariffs at that time. the future. A system based on full cost recovery objectives introduced progressively is therefore preferable. This has The division of operational funding between user charges direct implications for the scope of the waste management and municipal transfers is a crucial one also from the per- services to be provided and the opportunities available for spective of municipal solid waste services being both a pri- funding them. Charges levied on users must be realistic and vate and a public good. As noted in the Solid Waste Tariff affordable to most households, with measures in place to Setting Guidelines for South Africa: protect low-income or vulnerable households from unaf- ‘Residential waste collection is a public good in the sense that fordable charges. it is hard to exclude anyone from the service without leading While many countries have adopted the user or polluter to illegal dumping and public health problems. There are also pays principle, in practice it is often applied to only a pro- pure public services in the MSW system, such as street clean- portion of operational costs, with the balance being covered ing, which benefit all residents and firms. At the same time, by general municipal revenue. It is important that a munic- MSW collection is a private good in that it is a service deliv- ipality should clearly determine its cost recovery policy. ered to individual households, and it costs more to deliver the Ideally, it should be based on the user-pays principle, with service the more households are served. Tariff approaches the objective of covering the full costs of providing the ser- have to accommodate this dual nature of MSW services’119. vice. A key advantage of this is that it creates the opportu- In South Africa, the division is made on the legal require- nity for the waste management department to operate on a ment (see Box 13) that the costs of providing free ‘basic more commercial basis; for example, by establishing capital refuse removals services’ to indigent households should be accounts in which to deposit funds collected by the charge covered by the State (the public good component) whilst to cover future liabilities. It also forces the department to the balance of households are obliged to pay user charges examine and properly understand the full costs of its ser- (the private good component) that ‘reasonably reflect the vices, thereby helping it to decide if its services are afford- costs associated with rendering the service’. In Chile, as able to users and financially sustainable in the longer term. mentioned already, local authorities charge residents a Alternatively, the municipality might decide on the rev- waste fee based on both the fixed and variable cost com- enue objectives for user charges (which may be less than ponents of the service. Low-income households having a full cost recovery) and, importantly, those for the specific tax assessment below a given threshold are automatically mechanisms through which the balance of the annual reve- exempted from payment (the public good), resulting in rev- nue requirement will be funded out of municipal revenues. enues from user charges being collected from only some 20 The disadvantage of this approach is that municipal fund- percent of households (the private good), with the balance ing may lapse over time. It is likely to be easier to set funds being funded via transfers from the State. Based on: Solid Waste Tariff Setting Guidelines for Local Authorities, Department of Environmental Affairs, South Africa, May 2012 119 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 87 Box 13 Tariff options from the perspective of municipal waste management as a public or a private good in South Africa The Municipal Systems Act of South Africa requires that ‘tar- operation is a separate, ‘ring-fenced’ service which is iffs must reflect the costs reasonably associated with render- expected to recover all its costs from user charges. The use ing the service, including capital, operating, maintenance, of user charges is based on the argument that a municipal administration and replacement costs, and interest charges’. solid waste service has significant private good aspects and 120 However, solid waste services are provided as a public stresses the principle that users should pay for their use of good and the municipality has an obligation to provide cer- services. tain waste services. The National Policy for the Provision of Perspective 3 - combined approach. This approach is based on Basic Refuse Removals for Indigent Households incorporates the argument that solid waste services have components of basic solid waste services into the bundle of free basic ser- both public and private goods. A combined approach is aimed vices and this allowance needs to be factored into the setting at recovering the private component through user charges of tariffs. while the public component is recovered either through a uni- Perspective 1 – Financing of all solid waste services through versal flat charge or through an explicit solid waste compo- property rates. Under this approach all municipal solid waste nent incorporated into the property rates. services are funded from general rates. The full cost of the The mechanism proposed was based on the combined service is defined and an appropriate charge is included in approach and reflected the cost recovery objectives of the the general property rates to recover this cost. The argu- Municipal Systems Act by introducing user charges that ‘rea- ment for this is that solid waste is primarily a public good sonably reflected the costs associated with rendering the and that costs should be recovered from all citizens of the service’ whilst recognising that ‘solid waste services are pro- municipality. vided as a public good’ by factoring into the cost recovery Perspective 2 - Solid waste services funded by user charges. process the need to provide free basic solid waste services This approach is premised on the view that the solid waste for indigent households (as set out in the National Policy). Ibid 120 The key to financial viability is the predictability and reli- For example, the situation might arise that a municipal- ability of the revenue sources. If waste management costs ity decides to phase in the full cost recovery tariff over a are to be covered by a municipal tax on households, pos- given period. In this case, the future funding requirements sibly linked to a wider household services tax, then suf- should be fully recognised in advance and planned for. If, ficient flexibility must be built into the design of the tax rather than doing that, a municipality relies upon future to ensure that the tax rates are appropriate and can be costs to be covered by unplanned and ad hoc transfers, it readily adjusted to changing future conditions. If the rev- can be expected that service quality will steadily decline. enue stream is to be based on user charges, then the fee A problem with the preferred approach, though, and which base (e.g. household) must be secure, the fee rate must applies particularly to low and middle-income counties, is be correctly calculated and payment mechanisms must be that it can be challenging for a municipal mayor to divert simple and effective. It is important that there should be funds from municipal revenue to a capital reserve account control. Some mechanisms meet these criteria better than at times when the municipality is facing serious financial others. These are described in the following section. pressures. If it is decided that operational costs only should be cov- ered by user charges and that the balance of costs should 4.7.2 User charges be covered by other municipal resources (e.g. investment grants or budget revenue transfers) then these future Local authorities typically charge waste fees or impose transactions should be recognised, planned and provided taxes on users of municipal waste services. The methods for in advance and based on an assessment of the full by which these are levied and collected are important for remaining costs to be covered over time. the overall efficiency of the services. It is essential that all 88 4 Financing for sustainability and as an incentive users of the services are charged and pay for the services system costs, revenue requirements and indicative tariffs they use. High revenue collection rates are an important are estimated; and an annual budget management phase measure of a successful charging scheme. in which the specific tax rate or tariff is calculated and pro- posed for consideration, recognising all relevant and eligi- In many countries, the national government sets out in the ble cost factors. Waste Law (or equivalent) how municipal waste services are to be charged for, by way of a tax or a charge. If a tax The principal objective of household waste charging mech- is used it will specify the mechanism through which the anisms has traditionally been to satisfy budgetary require- tax will be imposed, this typically being added to a pre-ex- ments: to generate the revenue needed to maintain the isting tax mechanism, such as a council tax or rates. If a long-term financial viability of the municipal waste ser- charge is issued, the legislation will define the form of the vice in a reliable and predictable manner. More recently, charge base (such as a charge per property or resident) policy objectives have shifted and now include incentives and set out and issue guidelines on the method for calcu- to encourage users to minimise the amount of waste they lating the tariff and assessing its affordability. Typically, produce and to optimise the recovery of materials from the the municipality has authority for setting the level of the waste stream. tax and the unit rates on which charge calculations are based. General concepts considered during the fee setting As such, two broad types of charging mechanisms can now process include (i) the polluter and user pays principles; be recognised internationally: traditional fixed or vari- (ii) affordability and household incomes; (iii) financial able-rate (cost recovery) schemes and quantity-based sustainability and full cost recovery; and (iv) economic variable-rate (incentive) schemes. Hybrid fixed and vari- efficiency. able rate quantity-based schemes are now also used, having evolved to address the consequences of quanti- Although service users are legally obliged to pay their ty-based schemes on revenue stability121. waste services bill, levels of non-payment can be high. This can be because services are unaffordable to some Traditional charging schemes are designed to achieve rev- low income or vulnerable households but in many cases it enue predictability and cost-recovery objectives and are arises from municipalities not having adequate legal pow- unrelated directly to the level of service use. Quantity-based ers to enforce payment. It follows that the payment mech- schemes aim to encourage users to comply with waste man- anism should be convenient to users and that factors that agement objectives of waste minimisation and recyclable deter payment, such as high transaction costs incurred material recovery, they relate directly to the level of service in making relatively small monthly payments, should be use and vary between users. Complex hybrid schemes have addressed and remedied. evolved in response to the negative effect incentive-based schemes have on the stability of the revenue stream needed Setting appropriate levels for household waste service to maintain service financial viability. taxes and fees normally takes into account the social and economic conditions reflected in the ‘affordability thresh- 4.7.2.1 Traditional charging schemes old’, tariffs levied on CII entities should however be based Traditional charging schemes are used widely interna- on the full costs of the specific services provided. tionally to recover in full or in part the costs of munici- Cost analysis should be based on the full costs of provid- pal waste management services. They can be levied at a ing the services irrespective of whether full cost recovery fixed or a variable rate. For example, as a fixed tax or rate charges are to be levied. This is necessary to establish per private household or apartment; or as a variable tax whether the services are affordable and financially via- or rate per unit area of apartment floor space or number ble and to assess the implications of this for investment of residents. and recurrent financing needs. It is also a core factor in Fixed rate taxes and charges apply uniformly to all users determining if the scope and scale of the services should (the fee base) and result in a predictable revenue stream. be reconsidered. The cost and tariff analysis typically has two stages: a planning stage over a realistic time hori- Variable rate taxes and charges relate to a variable phys- zon in which annual waste flows, population parameters, ical attribute of the user (the fee base). The physical For a review and discussion of user charging systems and concepts relating to municipal waste management see Section 2, Waste Collection: To Charge 121 or Not to Charge, a Final Report to IWM (EB), Eunomia, March 2003 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 89 attribute itself is typically fixed (such as apartment floor To be confident that services are area), is unrelated to the use of the service and therefore also leads to revenue predictability. It does however intro- appropriate in terms of their scope duce an added layer of administrative complexity and cost and scale, are affordable to users and over the fixed rate alternative. financially viable over the longer-term, If, however, the charge base is itself variable, as it is if municipal officials must understand the based on the number of household residents, this can implications of the full costs of providing lead to revenue instability, as well to significantly higher those services. administrative complexity and costs. The waste charge is typically added to and itemised on the Variable rate taxes and charges are believed to be more property tax bill, although this is not always the case. For equitable insofar as the variable attribute against which example, waste charges are collected via the municipal the charge is calculated, such as apartment floor area, is council tax in England but are not itemised separately on to some extent a measure of ability to pay. Charging on a the council tax form. The amount of the tax can be a fixed per capita basis is thought to be a fairer charge as it comes rate per property or a variable rate (e.g. linked to property closer to the user or polluter pays principle. This addi- values or property valuation bands). The Bulgarian system tional degree of ‘fairness’ must be weighed against the is an example of this. Advantages are that the taxes are added administrative complexity of maintaining an up-to- relatively simple to administer, have low administration date population data base and the effect variations in this costs and high collection ratios, and offer revenue predict- have on the projected revenue stream122. As noted later in ability and stability. Disadvantages are that tax rates can the chapter, waste management services are characterised be difficult to adjust over time (e.g. indexed adjustments by high fixed costs. This means that the total household for inflation are politically sensitive) and funds may not charge should, ideally, be adjusted for only the marginal be earmarked exclusively for the provision of municipal cost change associated with a change in the variable fac- waste management services, and may cover other munici- tor. This is reflected in the hybrid schemes described below pal services, including street lighting and maintenance of for which the charge consists of a larger fixed fee compo- green areas. Ideally, the level of the municipal waste man- nent and a smaller variable (quantity-based) component. agement component of the tax should be defined precisely Mechanisms used widely for billing and charge collection in the budget assessment phase and hypothecated to be purposes include: used solely for defined waste management purposes. ❚ Indirect billing of a waste management tax linked to an Direct billing by the municipality existing property tax Under this arrangement the municipality is responsible ❚ Direct billing and fee collection by the municipality directly for all aspects of preparing and maintaining ser- vice population registers, establishing waste charges, bill- ❚ Direct billing and fee collection by the service operator ing users, collecting payments, chasing up arrears and enforcing payments. Unlike other public utilities, there are ❚ Indirect billing and fee collection by a third-party agent typically no sanctions for non-payment. Examples of fixed Indirect billing via a waste management tax linked to a or variable household charges are: wider municipal tax ❚ The fee base may be fixed as the property to which the Indirect billing is a form of waste management taxation bill is addressed. It is unrelated to the size of the house- provided for in municipal bylaws and typically identified hold or the quantity of waste collected. separately on the property tax (or similar) bill. It should be distinguished from the type of unbudgeted trans- ❚ The fee base is fixed per square meter of apartment or fer payments sometimes made by a municipality on an property area. The charge is calculated according to ad hoc basis to cover urgent or even recurrent financing the property area and billed to the property address. A requirements. justification for the scheme is that property area is an 122 For a discussion of ‘fairness’ in the context of municipal waste management services see ‘how to design an appropriate waste fee’, Principles, Practices, and Applications of Waste Management Fees’, ISWA, 2011 90 4 Financing for sustainability and as an incentive indicator of the ability of its occupants to pay for waste In principle, revenue collection by services. A public register of individual property surface local authorities gives them better areas must be maintained. control over their financial flows and ❚ The fee base is fixed per person permanently resident more instruments by which to influence at the address. The charge is calculated according to the quality of the services provided. the number of permanent residents and billed to the Municipalities also have greater legal property address. Charges are to some extent related to waste generated and hence to service use, and indi- powers than individual service providers rectly to the user and polluter pays principles. A register to enforce payment. of permanent residents living at the property address must be maintained. Direct billing by the operator Advantages of a fixed fee (or constant variable fee base Under this arrangement, a municipality appoints a component, such as floor area) are that it is relatively sim- licensed private municipal waste management company ple to administer, revenues are earmarked to waste man- to be responsible for both waste collection and fee col- agement services, a direct relationship is established with lection. It also determines the waste fee to be charged service users and municipalities gain a good understand- per household. The operator signs service contracts with ing of all aspects of the service. Disadvantages are that administration and payment enforcement costs can be individual households or housing associations, provides high relative to charge revenues and the potential exists services to and directly bills the contracted households, for low charge collection rates. The relatively low level collects fees from them and enforces payment from those of municipal waste charges may – somewhat counter-in- in arrears. Households and other legal entities are legally tuitively – act as a disincentive to payment, this depend- obliged to hold a valid signed contract with a licensed ing to some extent on the convenience of the payment municipal waste collection company. The template for mechanism. the standard service contract signed between contractor and households is agreed between the contractor and the This last point applies to all charging schemes. With web- authorities, and legal powers referred to in it should be based and automated teller machine (ATM) payment sufficient to enforce the obligation on all waste producers options becoming increasingly common throughout the to hold a valid contract in the waste collection area. world in recent years, problems with making small trans- actions have become greatly reduced. Cash payments col- Alternatively, high-cost individual contracts are in some lected by company staff at the customer’s door, or made countries replaced by a local ordinance which mandates at the post office, the bank or at the premises of the waste that households should register with and pay directly to collection company still happen in many countries, but a designated service provider. In such cases, though, the their share is gradually decreasing. ability of the private sector service provider to chase for arrears and enforce payment by households and other There is often interest in introducing systems based on generators can also be restricted. In Belarus, charging and per capita charging based on the belief that this is a fair waste fee collection is contracted out at the national level system from the perspective of the polluter pays princi- to a specialized company for a fee understood to be equiv- ple. Taking the user population as the charge base does, alent to 1-3 percent of total revenues collected. however, have two significant drawbacks. One is that it depends on a municipality’s capacity to maintain the pop- Delegation of revenue collection powers in this way can ulation register on which the fee base depends. The other lead to extra risk and cost to the waste service provider is that it brings a variable element into the charging pro- resulting from the non-payment of fees and from a lack of cess that adds a considerable layer of cost, complexity and adequate legal powers to enforce payment. This can lead uncertainty. Also, given that waste collection costs consist to ‘cherry-picking,’ where a waste company will provide primarily of fixed costs, service cost variations resulting services only in areas where households are willing to pay, from population changes are likely to be small whereas the an outcome of which can be illegal dumping and higher effects on revenue and administrative cost can be high. costs incurred by the municipality in maintaining public This applies to all traditional schemes. health and environmental quality. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 91 In principle, revenue collection by local authorities gives electricity utility as an example, three possible charging them better control over their financial flows and more mechanisms are: instruments by which to influence the quality of the ser- ❚ Setting the household as the fee-base vices provided. Municipalities also have greater legal pow- ers than individual service providers to enforce payment. ❚ Setting the number of residents in the household as the Nevertheless, many local authorities prefer to delegate fee-base responsibility for revenue collection to service providers. ❚ Setting electricity consumption (or consumption band) One reason for delegation can be longstanding established of the household as the fee base practice; another is a shortage in municipal administra- tive capacity to levy and collect charges directly. In some Setting the household as the fee-base cases, direct contact between the service provider and Utility services are typically provided at the individual users may support better customer relations, particu- household level at a defined address. If municipal waste larly if community confidence in the local authority is low. services are to be billed in a similar manner (i.e. per Examples include local authorities in Estonia, Italy, Bosnia household), then such an arrangement should not involve and Herzegovina, Cambodia and Pakistan. a significant amount of additional administrative effort by The main advantage of direct billing by the operator is that either the municipality of the utility once the databases it removes responsibility for billing and fee collection from have been linked and procedures for keeping the data up the municipality. Disadvantages can include123: to date have been agreed and implemented. A fixed waste fee can then be added to and separately identified on each ❚ Payment losses are typically higher when the fee is col- utility bill. lected by a private entity rather than when the munici- pality is the fee collector Key operational steps between the municipality and the utility are to jointly relate the residential property address ❚ Inability of the private sector contractor to secure con- register used by the municipality to the utility service cli- tracts with all users and the consequent public health, ent property address register and for the municipality to environmental quality and revenue losses associated inform the utility of the fixed charge to be added as a sep- with ‘cherry picking’ arate item on to each utility service bill. Alternatively, it could inform the utility of the individual (variable) charge ❚ Inadequate protection may be given to vulnerable to apply if, for example, it was based on the surface area households of the household. ❚ Administrative costs incurred by the municipality may The advantages of this approach are its administrative not be recognised simplicity once databases are linked, convenience for cus- tomers and the potential for high fee collection ratios. ❚ Related services may not be funded (e.g. separate col- Disadvantages are that administrative costs can be high lection and public relations) relative to the amount of revenue collected, the complex- ❚ There may be unacceptable fee collection practices ity of linking relatable databases, the scope being limited to the clients of the utility company and the lack of fee ❚ There may be difficulty in enforcing standards payment enforcement mechanism (this is common to all mechanisms). Indirect billing by a third-party: charges linked to a utility Setting the number of residents in the household as the Under this arrangement a municipality contracts with a fee-base utility company for it to bill and collect waste management charges together with charges payable by registered users If municipal waste services are to be billed not per house- of the utility service (e.g. water, gas or electricity supply). hold but against the number of permanent residents of a A core requirement is that the municipal register holding household then significantly more administrative effort the data needed by the utility to provide the billing ser- is needed before a municipality can transfer to the utility vice can be related to the utility client database. Using the company the data it needs in a form which is compatible 123 ISWA, Guidelines on How to Design an Appropriate Waste Fee: Principles, Practices and Applications of Waste Management Fees, 2011 92 4 Financing for sustainability and as an incentive with its client register. The municipality must calculate introducing greater levels of detail into the user fee charge the variable waste charge to be billed by the utility each base typically leads to increasingly higher administrative month to each household. To enable the utility to charge costs and revenue instability. households according to the number of people living at The following two case studies are examples of charging each address, it must do the following: systems linked to the local electricity utility company. In ❚ Calculate the unit waste service cost per resident (fixed the Mongolian example, the utility acts simply as the bill- fee) within the waste collection area (calculated from ing and payments mechanism and the case relates to a the annual revenue requirement and the total number of shift from billing per household to billing per person per residents in the area) household. In the Georgian example, the case relates to a shift from direct municipal billing per person to charging ❚ Relate the fixed fee per person calculated above to the and billing on an electricity consumption per household number of residents at each address basis. ❚ Calculate the total charge for each household and trans- In Ulaanbaatar, for example, the capital city of Mongolia, fer this data to the utility company for billing purposes the waste service fee collection method differs between the apartment and ger125 areas of the city. The billing sys- The municipality must have access to significantly more tem in the ger areas was switched in 2011 from direct fee data than when the household itself is used as the fee base collection by waste collection companies to billing via the and introduces greater levels of unpredictability into the local electricity distribution company. A single fixed waste revenue projections. charge is added to the electricity bill of the electricity com- Setting electricity consumption (or consumption band) of the pany customer registered at the geographical address. The household as the fee base switch led to a rise in fee collection rates from 28 percent in 2011 to 57 percent in 2014 (although a transaction fee If electricity consumption is to be used as the fee base of 23 percent is payable on the total amount of fees col- for differentiating waste charges between households, lected). The address relates to a single khashaa (or fenced the municipality must calculate the waste service cost area) in which two or three households live in separate per kWh of residential electricity consumption within the gers (or yurts) which typically take an electricity feed from waste service area. This value is then forwarded to the the supply of the registered user126. The effect of this is that utility which relates it to the electricity consumption of only one waste fee is paid for perhaps two or three house- individual waste service users and bills them accordingly. holds. The Waste Law has recently been amended and now An alternate is to calculate the household charge accord- mandates that waste charges should be levied on a per ing to consumption bands – this is preferred as it provides capita basis. The city is currently looking at alternative a greater degree of stability and predictability to the rev- charging mechanisms, one of which is to adjust its current enue projections. arrangement with the electricity company to charge on a per capita rather than on a per registered household basis. Setting waste charges that are linked to a variable fac- This would involve significantly more administrative effort tor such as the number of citizens permanently resident on the part of the local governments to maintain up-to- at an address or the amount of electricity consumed at date population registers and in redesigning the software that address can, to some extent, be considered as being interfaces between the population / household registers a ‘fairer’ charging mechanism as both can be thought of and the electricity company’s client database. as proxies for waste generated and therefore consistent with the polluter and user pays principles. But the ‘degree In another example, from Tbilisi, Georgia, the Tbilisi of fairness of a waste management fee imposed on users City Council (Sakrebulo) approved in 2011 a proposal is one of the most debated aspects of the fee; and each by the mayor’s office to tie the monthly waste collection fee model has its specific level of unfairness, depending fee to electricity bills. Under this system each household on the stakeholder concerned’124. This section shows that would have to pay a waste collection fee per kilowatt of 124 Ibid (ISWA) 125 Ger areas are informal settlements that expanded rapidly across UB following the intense rural to urban migration that occurred after 1990 and are home to some 58 percent of the population (Byamba, B. and Ishikawa, M., 2017). 126 Byamba, B. and Ishikawa, M. Municipal Solid Waste Management in Ulaanbaatar, Mongolia: Systems Analysis, 2017 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 93 electricity consumed by the household each month. Prior payment periods. As such, the schemes can lead to insta- to 2011, a flat fee per family member was charged. It was bility and unpredictability in the revenue stream. This is assessed that revenues from the new charging system the principal reason why hybrid charging schemes have would be double those of the previous system. It was also been developed, which typically include a large fixed- decided at that time that half of the fee payable by the rate charge component. These are considered later in the most vulnerable in society would be covered by the Tbilisi section. government127. In 2015, the State Audit Office of Georgia reported that between July and December 2013 revenues Unlike traditional charging schemes, quantity-based from municipal waste collection in Tbilisi represented a schemes are integral to the design and operation of the fee collection ratio of 92 percent, the best outcome of all collection system. Choices between collection systems, municipalities and self-governing cities in the country. container types, rate structures and billing systems are This performance was attributed in part to the fact that the inter-related. The collection system and container types electronic accounting system was the same as the billing selected largely dictate the type of charge structure and system and that it determines the exact number of paying billing system that can be used. Conversely, deciding to customers. It noted that the Electricity Provider Company stay with an established charging and billing system will organizes the billing system and that every month the constrain the type of collection and container systems that population receives electronically all printed utility bills can be used. in person, including the waste bill. If the waste fee is not There are two types of quantity-based variable-rate paid by a prescribed date the person is restricted from the charging scheme: electricity supply.128 4.7.2.2 Quantity-based charging schemes ❚ Charging by waste volume, as set out in approved con- tainers or bags of known volumes, and as approved by Quantity-based (variable-rate) charging schemes (also the municipality, i.e. users are charged per m3 of waste known as pay-as-you-throw schemes) relate to the amount as measured by the capacity of the bin or bag in which it of waste collected. They aim to give service users incen- is contained and put out for collection. tives to adjust their behaviour in ways that help meet governments’ waste management policy objectives. ❚ Charging by the weight of waste, as set out and weighed Incentives take two forms: directly on the collection vehicle, i.e., users are charged ❚ To encourage users to reduce the amount of waste they per kg of waste put out for collection. produce. The charging scheme is designed to meet waste The two approaches have significantly different container, minimisation objectives. Users can choose between the collection, charge calculation and billing requirements. It amount of waste they put out for collection and hence is important to understand the effects that quantity-based the amount they must pay to have it collected. charging has on system costs and revenues as both involve high levels of municipal involvement. ❚ To encourage users to reduce the amount of waste they produce and to separate their waste into recyclable and Volume based schemes residual fractions. Users face choices related to both (i) Volume-based waste collection and charging schemes are the total amount of waste they put out for collection and designed around bins, bags, tags and stickers of types (ii) the amounts they put out for recyclable material and and capacities specified (and commonly provided) by the residual waste collection, for which differential charge municipality. The measure used for charging purposes is rates apply129. the volume of the container and not the actual volume of Users are commonly charged for residual waste only, this waste contained in the container. Volume-based collection encouraging them to minimise the total amount of waste services and charging schemes used internationally come they produce and to maximise the amount they put out for in many different configurations, offering users different separate collection. As intended, bills can vary between levels of service and choice. 127 Tbilisi Waste Collection Fee Tied to Electricity Bills, News, 24/06/2011 128 Performance Audit Report of Municipal Solid Waste Management, State Audit Office of Georgia, February 2015 129 This is typically zero-rated for separately collected recyclable material with the full charge being included in the residual waste component. 94 4 Financing for sustainability and as an incentive Some municipalities provide waste bins, waste bags, or Since 2003, household kitchen waste has been recycled stickers or tags to attach to approved containers or bags. for animal feeding (pig-feed waste) and agricultural use Others are based on pre-paid bags, tags or stickers. Some (compostable kitchen waste). It is important to highlight offer choices over the number and/or types of containers that that such complementary measures were implemented to can be used, others over the frequency of collection. More make the pay-as-you-throw policy successful. In 2000, choice leads to higher operational complexity, and higher the total waste generated per day was 2,970 tonnes; by administrative costs to be covered by the municipality. 2011 it had fallen to 1,008 tonnes and waste generation per capita had fallen by 65 percent. Due to a combination The schemes depend on the willingness and ability of of several policies, in December 2014 the waste reduction users to respond to the choices and price signals that con- rate reached 67 percent and the recycling rate 56 percent. front them and on how municipalities respond to imple- The rate of proper garbage disposal is 100 percent and the ment those choices. For example, a household may inform incineration rate of resources that cannot be recycled or the municipality that it wishes to switch from a larger bin reused has reached 99 percent.130 to a smaller bin (which may only be feasible following a sufficiently large reduction in the volume of waste pro- Weight-based schemes duced). This calls for two responses from the municipality: an operational one (the supply and removal of bins, adjust- Weight-based waste collection and charging schemes ments to on-bin or on-vehicle user data recording devices) entail the waste set out by users being weighed directly and an administrative one (adjustments to charging and on the collection vehicle. The measure used for charging billing arrangements). purposes is the weight of the waste, the bin being weighed before and after emptying. Bins are fitted with electronic Schemes based on pre-paid bags, tags and stickers avoid identification devices for logging household data relating the need for billing and offer financial incentives to min- to each waste bin uplift. The weight and household data imise and separate waste. They might also encourage are processed automatically, and the household is invoiced excessive compaction, illegal dumping, and fraud, call- accordingly. Unlike volume-based schemes, weight-based ing for heightened levels of monitoring and enforcement schemes record a change in waste quantity automatically of collection system conditions and standards (e.g. recy- and immediately. clable material specifications; appropriate use of bins, bags, tags and stickers) by the municipality and diligence Weight-based schemes offer a direct waste reduction by collectors. incentive. Each kilogram of waste avoided results in finan- cial savings at the point of collection. This does not apply For example, in 2000 Taipei, Taiwan, officially launched to volume-based schemes, where action from the munic- its ‘Per-Bag Trash Collection Fee Program’, a volume-based ipality is needed in response to a request from the user; pay-as-you-throw scheme based on the polluter pays prin- for example, to replace a large bin with a smaller one or to ciple which obliges residents to purchase designated gar- change the frequency of collection. But both schemes typ- bage waste disposal bags at convenience stores. Bags ically offer free collection of separated recyclable materi- come in different volumes and prices. Recyclable materi- als at the point of use, this being an incentive for users to als are exempted from the obligation. Prior to implement- divert more waste from residual to recyclable collection131. ing the scheme, Taipei adopted policies for reducing the quantity of waste produced and for processing resources Weight-based schemes have a higher level of techni- recovered from the waste stream. These were backed cal, operational and administrative complexity than up by a single policy initiative developed in the 1980s volume-based schemes. They are more expensive to to favour incineration as the primary waste treatment implement and operate. More labour is typically needed method and landfill as the secondary option. Immediately to manage and monitor the billing schemes (although the after introduction of the pay-as-you-throw system, cit- more complex volume-based charging schemes demand izens demanded an exemption for kitchen waste. In a high level of administrative input). Apart from the high response, the city government began a program to col- costs, and possibly as a response to them, a negative lect and recycle all household kitchen waste separately. effect of direct charging to the householder is that many 130 The example is closely based on Waste charging system in Taipei, Taiwan, ‘Per-Bag Trash Collection Fee Program’. Pocacito, European post-carbon cities of tomorrow, available at https://pocacito.eu/sites/default/files/WasteCharging_Taipei.pdf 131 This description is based on Good Practice, Limerick/Clare/Kerry Region, Household Pay-per-Weight Charging System, September 2014 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 95 householders see an opportunity to avoid paying for their charge). In economic terms, the price payable for an extra waste management and illegally dispose of their waste bag should reflect the marginal (variable) cost of collec- rather than pay for its collection and treatment132. tion plus the bag cost. Hybrid schemes can be significantly more complicated than this, involving complex charging Quantity-based charging schemes have an effect on the and payment systems that can be confusing to users and annual revenue stream needed to ensure the financial via- expensive to implement and administer. bility of the waste management services. To guard against revenue instability, hybrid charging arrangements are For example, municipal waste management services in now more commonly adopted in some of the more devel- Ireland are provided by private sector firms operating under oped countries. competitive, open-market conditions. Individual firms offer Hybrid Charging Schemes weight-based, pay-by-use collection services and house- holds choose between them depending on the service struc- Quantity-based charging schemes are an example of the tures and the price schedules offered. The charges applied multi-objective dilemma: how to satisfy the dual objectives by waste management companies are a matter between of (i) revenue stability and predictability and (ii) waste min- those companies and their customers, subject to compli- imisation and waste separation. Due to the cost structure ance with all applicable environmental and other relevant of typical municipal waste management services, a sta- legislation, including contract and consumer legislation134. ble and predictable revenue stream cannot be achieved if Some examples of charging structures are: the charging mechanism relates to a declining charge base (waste quantity). This is because the costs of waste man- ❚ Per lift charge (including weight allowance), plus per kg agement, and especially waste collection, are largely fixed. charge for excess weight above allowance Fixed costs are incurred irrespective of the quantity of waste contained in the containers being emptied. ❚ Service charge, plus charge per lift per bin Typically, more than two thirds of total waste system costs ❚ Service charge, plus charge per lift per bin, plus per kg are fixed, and the less technically advanced the waste sys- excess charge tem the higher the share of fixed costs in the total. This ❚ Service charge plus per kg weight charge means that although a reduction in waste quantity results in a proportionately far smaller reduction in total waste ❚ Service charge plus weight band charge costs, in a purely quantity-based charging scheme it will lead to an equivalent reduction in the charge (and hence ❚ Service charge, plus charge per lift per bin, plus per kg in the amount of revenue collected). For example, if fixed excess charge costs are taken to be 70 percent and variable costs 30 percent of total costs, then a reduction of 20 percent in ❚ Service charge (including weight allowance), plus per the residual waste presented for collection will result in kg charge for excess weight above allowance a 6 percent reduction in total costs.133 The weight-based ❚ Charge per lift per bin charge paid by the user will however fall by 20 percent. Net revenue falls by 14 percent ❚ Per lift charge (including weight allowance), plus per kg charge for excess weight above allowance It is for this reason that hybrid charging schemes have evolved which combine a large, fixed fee component with Experience shows that quantity-based pay-as-you-throw a relatively small variable component. A simple example systems lead to a fall in the amount of waste set out for for a volume-based hybrid scheme is of a local authority collection and a rise in the amount of recyclable material which supplies households with a fixed number of waste that is separately collected. At the same time, potential collection bags per year. The costs of the standard waste drawbacks of the schemes include: collection service (including bags) are covered by a fixed annual waste fee (fixed charge). Users can purchase addi- ❚ Higher operational and administrative costs and tional bags separately from the municipality (variable complexity 132 Ibid 133 ISWA, Guidelines on How to Design an Appropriate Waste Fee: Principles, Practices and Applications of Waste Management Fees (2011) 134 Waste Collection Charges, Department of the Environment, Climate and Communications, 5 January 2021 96 4 Financing for sustainability and as an incentive ❚ Revenue instability be to limit the ability of municipalities to continue inde- pendently to provide waste collection services. ❚ Heightened levels of monitoring and enforcement of standards In some countries, local authorities are free to make their own decisions on tariffs. In others, decisions are subject ❚ Increased incidence of illegal dumping to the approval of designated regional or national authori- ties. For example, in Belarus, municipal waste tariffs must ❚ Greater diligence by collectors (excessive compaction, be approved and publicized by the regional administra- fraud, recyclable material specifications, appropriate tion for services. In Brazil, tariff setting mechanisms vary use of containers, contamination of recyclables) between the states, with the approach to assessing tar- ❚ Pay-as-you-throw models cannot readily be adapted to iffs according to the size and function of a residence or other council services, such as collections from street business being the most commonly used. In Ghana, local litter bins government assemblies have powers to create by-laws for setting and collecting user fees and which require them to undertake annual reviews to adjust tariffs for inflation, 4.7.3 Tariff regulation exchange rates, fuel prices, etc. Specific tariffs are not The rules for calculating municipal waste tariffs are usu- set for municipal waste services in Morocco as these are ally defined in national legislation, such as the Waste financed through a municipal services tax established at Law and its accompanying regulations. The Law typically the national level and based on the rental value of prop- sets out the scope of services covered; the costs eligible erty owned or leased. Although based on clear criteria for inclusion in the charge; the fee base to be used for there is no direct connection between the tax and the vol- charging purposes; and the eligible charging and payment ume of waste generated or the level of service. mechanisms. The scope of services covered by the tariff differs consid- 4.7.4 Subsidies from central transfer/general erably between countries. In some it may be limited to municipal revenue waste collection and disposal whereas in others it might Charging for municipal waste management services is also include the collection of street litter, street cleaning, well established practice in developed countries, where green area maintenance, and winter cleaning and snow implementation of the ‘polluter pays principle’ and the removal. achievement full cost recovery objectives are key policy National legislation may prescribe the specific type and objectives. In low and middle-income countries, however, structure to be used for the municipal waste fee, or it may transfers from municipal consolidated revenues are com- allow local authorities to choose between alternatives. For monly used partly or wholly to fund municipal waste ser- example, in Romania and Moldova a local authority may vice costs and are sometimes supported by transfers from choose between a local tax to be collected by the munic- central or regional government budgets. ipality or a service fee to be charged directly by the ser- Arguments for using municipal transfers for waste man- vice provider to each household individually. In Bulgaria, agement operations vary. In many low-income countries, legislation specifies that the charge must be calculated a significant part of the population lives below the pov- according to the quantity of waste produced (municipal- erty line, which makes charging households for waste ities may choose between volume or weight-based tariffs) services extremely unpopular and challenging. In low-in- but, as an exception to this, it may be determined either come countries such as these, where income distribution on a per capita basis or as a promille of the property value is heavily skewed, it can be fairer to draw more heavily on if the quantities of municipal waste cannot be defined. National legislation might also define the forms of inter- Many countries have adopted graduated municipal cooperation that may be adopted and the effects schemes where the proportion of fee- these may have on selected waste service charging mod- els. In particular, the effects of mechanisms that provide based finance is progressively increased for common regional tariffs to be set up by several local over time whilst the general revenue authorities. One effect of this type of arrangement would component falls. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 97 consolidated income than on user charges, especially if an 4.7.5 Extended producer responsibility effective and progressive local taxation system is in place. financing Other arguments in support of using municipal trans- EPR schemes are a potentially important financing source fers can be the lack of comprehensive or up-to-date for municipal waste management. They are an efficient property registers that reliably cover the populations resource management mechanism which enables produc- receiving waste services, as in the case of informal set- ers to take responsibility for the end-of-life management tlements; incomplete information on household numbers of their products by becoming involved in their collection, or residents living within specific areas (such as in slum sorting and treatment for recycling and recovery. areas); or an absence of an historical culture or practice of charging for waste and other services, as was the case Their basic feature is that participants across the product in Eastern Europe prior to 1989. Direct funding from con- and packaging value chain (manufacturers, importers and solidated revenue also reduces administrative expenses. retailers) assume a significant degree of responsibility for the environmental impacts of their products across their For example, many local authorities in the Philippines do life cycles. This relates to the ‘upstream’ impacts of prod- not charge households for waste services, the costs being ucts resulting from their production (e.g. materials selec- fully funded out of municipal revenues. In Ghana, whereas tion and product design) as well as to the ‘downstream’ municipal assemblies are expected to charge users the full impacts related to their use and disposal. costs of waste collection and disposal, general revenue is used to offset the costs of providing services to house- EPR schemes can play an important role in the financing of holds that are not registered and which therefore do not separate waste collection, sorting, recycling and treatment pay for services. In Chile, local authorities must fund most of special waste streams, such as packaging waste, WEEE, of the costs of service as the majority of households are batteries and accumulators, used oils and spent tires. exempt from paying the fee based on the tax assessment of Establishing a producer responsibility scheme to deal their properties. Even in Japan, many local authorities do with a specific packaging waste stream is premised on the not levy charges and finance waste services from property assumption that the obligated industry will be responsible tax revenues, though this practice is now changing with a for financing the separate collection and sorting of the rel- shift towards direct charges. evant packaging waste. The main disadvantages of using municipal revenues to At the municipal level, Producer Responsibility Organiza- cover a significant share of waste management costs come tions (PROs) must establish and maintain the infrastruc- from a long-term perspective. First, it places a signifi- ture needed for the collection (or take-back) and sorting of cant burden on municipal budgets, a burden that is likely packaging waste. Citizens should have ready access to this to increase as waste management costs increase in the infrastructure so that they can separate their waste daily future. Second, those who do not pay for the services are and effective household waste collection services can be less motivated to engage in waste prevention and source deployed. As packaging waste at the industrial and com- separation activities, whereas those under pay-as-you- mercial levels is commonly collected directly by waste col- throw charging schemes are clearly incentivized. lectors, a minimum requirement of PROs must be that they Many countries have adopted graduated schemes where establish systems both for monitoring packaging quanti- the proportion of fee-based finance is progressively ties that have been put on the market and collected and increased over time whilst the general revenue compo- quantities that have been recycled. nent falls. This can be a valuable approach politically for The responsibility put on producers for waste manage- gradually phasing in tariffs to their full cost recovery level ment can be financial, organizational, or both. In the first within affordability constraints. instance, individual producers or EPR schemes pay fees to municipalities which remain responsible for waste man- agement operations (usually the collection), whilst recy- cling is outsourced to specialist contractors. In the case of organisational responsibility, producers and PROs both finance and organise waste management operations and contract directly with recyclers. 98 4 Financing for sustainability and as an incentive Initial investments in separate collection containers is landfill are avoided. These should also be accounted for typically covered directly by the EPR scheme, with the col- when assessing the net costs of the materials recovery lection vehicles and sorting infrastructure being provided system. by the companies contracted to undertake the respective Revenue from the sale of recyclable materials is subject to service. In specific cases, the EPR scheme might invest in two main risks: the quantity of valuable materials in the sorting facilities and transfer those assets to a specialized separately collected waste and the markets for the mate- company contracted to operate the service. Given the lim- rials recovered. Unless driven by mandatory obligations, ited financial resources of many local authorities, such materials recovery systems should be considered only if practices could provide valuable support to improving there is a high degree of confidence that: (i) a realistic and waste recycling at the local level. predictable supply of recyclable material is available for For example, in Bulgaria, the PROs for packaging waste collection, and (ii) proven markets either exist or can be have full financial responsibility for establishing systems created for the recycled materials. Markets for recycla- for the separate collection, sorting and recycling of pack- ble material are volatile and uncertain, and assumptions aging waste. The PROs fund initial investments for sepa- made on sales potential and selling prices can be specula- rate waste collection containers and make payments for tive. For example, low-density polyethylene (LDPE) prices collection, transport and sorting of separately collected on the European market fluctuated by some 300 percent in fractions. In this case, no costs are incurred by the local the period January 2019 – September 2020.135 authorities and the separate collection services function The quantity and quality of dry recyclable material can be in parallel with the collection services for residual and significantly influenced by the activities of informal col- other waste fractions provided under municipal responsi- lectors. The informal sector collects significant quantities bility. A different approach is implemented in the Czech of recyclable material in the absence of any formal invest- Republic, where separate collection is organized directly ment in separate collection by the local authorities. It also by the municipality and the PRO makes a financial con- collects mostly higher-value recyclables, leaving those of tribution for each tonne of separately collected and recy- lower value to the local authorities136. It is likely that the cled packaging waste. In this case, the upfront separate informal sector is better informed about conditions and collection and sorting costs incurred by the municipality prices in the recyclable materials markets than the formal or service provider are later fully or partly reimbursed by sector. the PRO. It should be noted that, in EU countries and in accordance with the provisions of the Waste Framework International experience also shows that when local Directive, the EPR scheme should cover at least 80 percent authorities install containers for separate collection of dry of the respective costs for managing waste resulting from recyclables they are often targeted by the informal sec- the product categories collected. tor, which sells the material to traders or even via collec- tion points established by the public authorities. In this The possible use of EPR is considered in Chapter 7. way the local authorities incur financial losses on the sep- arate collection systems they have installed even though 4.7.6 Revenues from the sale of recycled increased quantities of recyclable materials are diverted materials and energy from waste from disposal. In Ningbo, China, for instance, after the Policies seeking to increase the amount of municipal waste city’s dry recyclable open-top containers had been emp- recycled and to establish more advanced treatment tech- tied daily by informal pickers, the city decided to replace nologies are often based on assumptions on the municipal them with picker-proof, smart containers. As a result, the revenue to be generated from the production and sale of amount of dry recyclable material collected through the recovered materials and energy. Although these revenues public stream increased many-fold. Similar experiences rarely cover implementation costs, they can be significant are reported from Spain, where high-value cardboard pur- and should be taken into account when defining financing loined from the public stream imposes a financial cost on policies and estimating tariffs. It should also be remem- the local authorities. bered that by separately collecting recyclable materi- Markets for materials recovered from municipal waste are als the costs of having to collect and dispose of them to poorly developed and organised in many countries, and Based on waste plastics market data at www.PalSticker.de 135 Only about 20 percent of the municipal plastic-waste stream has enough value to incentivize waste pickers to collect it: Stemming the Tide: Land-based 136 Strategies for a Plastic - free Ocean, Ocean Conservancy and McKinsey, 2018 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 99 assumptions on product markets, sales potential and sell- Importantly, it must be recognised that from the finan- ing prices can be speculative and uncertain. A reliable cial perspective municipal waste management is a net market analysis of the potential for recyclable material cost activity. The extensive systems of waste material sales should be undertaken prior to final decisions being recovery found in the more affluent countries today result taken on introducing separate collection systems and con- from governments mandating uniformly strict and bind- structing materials recovery facilities. This should include ing waste management targets. For example, as part of a thorough assessment of the activities of the informal its programme of measures to achieve these targets, the sector. United Kingdom government levies a landfill tax on each tonne of waste disposed of to landfill. The tax currently Refuse Derived Fuel (RDF)137 is produced in some munic- stands at £94/tonne (US$126), in addition to the full cost ipal waste treatment processes. Different classes of RDF recovery charges levied by landfill operators. The tax acts are produced, depending on their net calorific value, the as an incentive for municipalities to find waste treatment content of specific chemical elements (such as chlorine and disposal routes that are environmentally preferable to and heavy metals), moisture content and particle size. landfill. Placing a tax on landfill makes these alternative Prices depend on local conditions and user requirements. routes relatively more financially attractive. RDF prices can be negative, or the product may only be accepted by industrial users if provided free of charge and Put simply, this has led to a range of recycling, compost- meets strict requirements, such as for calorific value and ing and other waste treatment facilities and services being moist content. This in most cases necessitates pre-treat- offered by private waste management firms as lower-cost ment and drying. Transport costs from waste treatment alternatives to landfill. Firms are motivated by the oppor- plant to final recovery facility is another important factor tunity to make a profit on their investments. The cost of in the RDF economy. these services (including profit) is covered by the fees the firms charge municipalities for using them. These costs, The sale of electricity and heat produced from waste treat- in turn, are funded by the charges municipalities levy on ment processes can also be a significant source of reve- households and businesses. Municipalities rarely make nue, particularly from waste incineration plants and some a profit. In the absence of government mandates, there- anaerobic digestion facilities. Utilization of landfill gas for fore, investment in such facilities should be made only energy production from some large facilities can also be after thorough analysis of material availability, technical financially viable. State policy on renewable energy can systems and costs, markets, prices, risks and benefits to have a significant impact on the financial viability of waste- society. to-energy schemes and their revenue generating capacity. Many countries apply preferential tariffs for energy pro- Generally, costs rise as municipal waste services are duced from waste that can lead to substantial increases in improved and move up the ‘waste hierarchy’. The avail- revenues with which a significant share of a facility’s oper- ability of revenue from waste treatment activities should ating costs can be offset. The payment of effective subsi- be assessed against cautious assumptions until such time dies to facilities of this kind should however be supported as experience enables decisions to be made with a high by thorough cost benefit analysis which demonstrates that degree of confidence. Realistic commercial pilot projects the economic benefits flowing to society from such invest- can be a useful starting point for this. ments outweigh their costs. Some methods for treating biowaste also have revenue generating potential, particularly for high-quality com- post, if local product markets exist. Nevertheless, the scale of any such revenues is likely to be small relative to those from the sale of recyclable materials such as paper and cardboard, plastics and metals. The term Refuse Derived Fuel (RDF) is used in a narrow sense, referring to processed household and similar waste. The use of refuse derived fuels 137 produced from municipal waste is a common practice in many countries. Whereas recovery and recycling of materials in waste has well developed over the years, remaining fractions still contain valuable energetic content. The energetic content is well used in modern mass burning incinerators (waste- to-energy plants). Alternatively, certain wastes can be used as fuel in dedicated plants such as cement kilns, lime plants, steelworks, combined heat and power plants and other power plants. Such fuels, when produced according to the requirements of the standards are referred to as Solid Recovered Fuel (SRF). In the EU, Solid Recovered Fuel (SRF) is a ‘solid fuel prepared from non‐hazardous waste to be utilized for energy recovery in incineration or co-incineration plants, and meeting the classification and the specification requirements laid down in EN15359’. Recycling center in Chisinau, Moldova. Photo: © Friptuleac Roman | Dreamstime.com 5 101 Organizational models 102 5 Organizational models 5.1 Fit-for-purpose 5.2 The role, mandates and International experience indicates that efficient and effec- responsibilities of local authorities tive waste management systems are characterized by The organisational framework at the local authority level organizational models, the roles and coordination struc- should encompass many tasks for ensuring the effective tures behind waste management services. Effective orga- implementation and sustainability of the waste manage- nizational models respond to the administrative needs of ment systems (see Table 5). Effective coordination across the desired waste management system, and not the other administrative departments of local authorities is essen- way around. Taking an objectives-driven organizational tial and requires: approach allows designs to be customized to core objec- tives. The alternative, fitting waste management actions ❚ Clear division between ‘planner’ and ‘regulator’ roles to an existing organizational model, leads to capacities and ‘client’ and ‘operator’ functions within the various and coordination structures that may not be suited to pol- administrative units of the local authority and service icy objectives. Waste management organizational models providers. should be specifically assessed against specific financial, operational, and administrative requirements based on ❚ A single administrative entity that is responsible for policy objectives. coordinating and overseeing all administrative waste management system tasks and that is adequately staffed Good organizational models are those which seek to and resourced. address financial limitations or investments in larger waste management facilities, including where cooperation ❚ A waste management team with trained personnel and between local authorities may be beneficial for the over- the financial resources to implement and maintain an all system. The organization of services might also focus efficient and environmentally sound waste management on making waste management operations attractive to the system138. private sector in order to harness its potential for bring- ing investment, new technologies and technical know-how ❚ Authority and capacity to monitor performance and into the delivery of services. enforce compliance at all levels. Although organizational models are mainly implemented ❚ Ability for day-to-day operational oversight of waste by local authorities, their implementation can be aided management tasks, ensuring full compliance with all significantly if supportive arrangements have been put relevant legal and planning requirements. in place by the central government, namely in the form of an enabling legal framework for intermunicipal coopera- ❚ Financial management systems that fully capture waste tion and private sector involvement, specific guidance or management costs and related data, including on waste incentives. flows and populations served. This chapter considers three main models for the provi- ❚ User tariffs that are affordable to residential customers, sion of municipal waste management services: commercial enterprises and small businesses. ❚ Models for service delivery by local authorities ❚ Provision of public awareness raising campaigns on all aspects of the waste services provided. ❚ Intermunicipal cooperation between local authorities Effective coordination of waste management tasks across ❚ Private sector involvement administrative departments of local authorities is essen- Specific examples for the provision of waste management tial. The main tasks and coordination requirements are services by national entities are also provided. described under following categories in Table 5. 138 E.g. to plan, tender and contract waste collection and disposal services, procure trucks and containers, establish new collection vehicle routes and systems, optimise container placement, prepare and implement projects for separate waste collection and recycling, provide for safe recovery and disposal of waste, create a waste management monitoring and management information system. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 103 Table 5 The main waste management tasks for local administrations Role assignment Key tasks General category Policy maker and ❚ To meet all responsibilities of the local administration relating to waste management, including identifying specific tasks and recommending waste management policies, legislation, strategies, plans and actions. designated to other ❚ Report periodically on the implementation and performance of the waste management system. roles ❚ Propose new or amended local ordinances/regulations as considered necessary to achieve the policy objectives. ❚ Take the strategic lead in developing a high-level approach to support private sector involvement in waste management financing, operations and ownership. ❚ Coordinate the management of waste management contracts to achieve an optimal and sustainable waste management system. ❚ Set performance standards. ❚ Provide general administrative, legal, communications and training support. ❚ Obtain and maintain necessary permits, approvals, and licences and assist the contractors in doing the same. ❚ Cooperate, coordinate and communicate and assure effective liaison with internal and external bodies on all issues requiring technical, financial, administrative, legal, regulatory or organisational follow-up. Waste management planning Planner (participation ❚ Prepare and update the waste management plan. of service providers in ❚ Undertake and implement operational planning processes for waste collection, treatment and disposal cor- operational planning is responding to the needs. possible) ❚ Develop estimates of the full costs of solid waste management and solid waste management fees. ❚ Carry out the planning of waste management projects where needed. ❚ Support the development of waste minimisation initiatives and markets for recycled products. ❚ Co-ordinate recycling, composting and waste reduction activities. ❚ Coordinate the development of municipal hazardous waste collection facilities. ❚ Formulate plant and equipment specifications. Information and data management Planner ❚ Co-ordinate, update and maintain a waste management information system and the collection and analysis of statistics relevant to waste management services. ❚ Assure appropriate use and implementation of data collection methods, analysis of waste composition, waste generation projections. ❚ Monitor the achievement of performance standards. Project development Service delivery ❚ Prepare (or co-ordinate/support the preparation of) high quality tender documents, carry out such tenders, (Client) negotiate, and conclude contracts with such parties. ❚ Co-ordinate and promote a high level of competition in waste services e.g. by arranging for the early pub- licity of upcoming tenders. ❚ Take the lead in co-ordinating the technical specifications of tenders and in the technical aspects of tender evaluation and contract negotiations. ❚ Define the service delivery quality requirements and performance indicators in the case that services are provided directly ‘in-house’ by the local authority 104 5 Organizational models Table 5 Cont. Role assignment Key tasks Financing and cost recovery Financier ❚ Develop and update the waste management investment program. ❚ Maintain up-to-date data on the current financial position, expenditures, revenues (including fee collection performance) and cash balance. ❚ Coordinate preparation of the annual budget for waste management. Ideally, prepare shadow accounts using accruals-based accounting (full accounts for municipal operating companies). ❚ Monitor implementation of the waste management budget. ❚ Advise on tariff policy, tariff calculation methodology, user charging and payment mechanisms, and prepare current tariff estimates for political approval. ❚ Coordinate, implement and monitor fee collection performance generally and by individual service users. ❚ Identify and evaluate options for using external finance in implementing the waste management plan and for priority investment projects. ❚ Prepare applications for investment finance and liaise with external financing institutions. Project management and supervision Regulator ❚ Liaise closely with the internal or externally contracted waste management facility inspectors responsible for the supervision of works contracts. ❚ Verify the implementation of the works and services contracts, and endorse the regular/monthly prepay- ment verification sheets issued by the facility inspector. ❚ Enforce control and penalty mechanisms on service providers as required. ❚ Co-ordinate practical supervision activities across all waste management services and facilities and ensure that all supervision activities are carried out efficiently and effectively. ❚ Ensure that there is effective coordination between the completion of facilities construction (and infrastruc- ture service provision) and the commencement of operations, including that all legal, financial and environ- mental conditions are met. ❚ Facilitate the resolution of disputes between service providers or between service providers and users. Regulation enforcement Regulator ❚ Enforce regional ordinances/regulations for waste management and general cleanliness. Communication and awareness raising Planner, service ❚ Provide the public with information on their waste management responsibilities and ensure that users are provider, regulator (for kept fully aware of the scope and costs of the services provided. citizen complaints) ❚ Maintain an up-to-date public website, complaints hotline and any other necessary public relations activities. ❚ Develop a public awareness and communications strategy, ensure the development and production of com- munications programs and materials. ❚ Coordinate, as appropriate, with contractors in their development of public information materials and media campaigns. Capacity development All roles ❚ Be equipped with the resources and skills needed to act as a professional and experienced partner with the various participants involved in implementing the waste management plan. ❚ Hire personnel for operational tasks, and establish the technical units needed to meet specific requirements Bridging the Gap in Solid Waste Management | Governance Requirements for Results 105 The implementation of such an extensive list of tasks and In large municipalities the tasks are activities requires significant human resources and admin- istrative capacity at the local level. usually coordinated through a specialized waste management or environmental In large municipalities the tasks are usually coordinated through a specialized waste management or environ- protection department and involve mental protection department and involve several other several other administrative units administrative units which deal with public finances, which deal with public finances, capital capital investment, public procurement and inspection. investment, public procurement and The proper organization of waste management planning, inspection. financing and service delivery is challenging in smaller local authorities where, in many cases, a single person is responsible for several services. Properly address- management services or for a number of entities being ing waste management matters in municipalities such as engaged to provide various components of the system these may require transferring some functions and respon- sibilities to service providers or establishing cooperative (e.g. collection, treatment, landfill, etc.). In some cases, arrangements with neighbouring local authorities for the the responsibilities of the company are limited to waste implementation of particular tasks. management and quite often include street cleaning. In others, the company might have a far broader scope of 5.3 Direct provision of waste responsibilities, covering practically all publicly pro- management services by local vided services, such as water supply, street lighting, authorities maintenance of green areas, etc. The practice of engag- ing public companies also differs across countries. In The direct provision of waste management services by some, contracting is done through public tendering local authorities (in-house model) is common practice arrangements where local authority companies compete worldwide. In principle, two models exist for in-house on equal grounds with private service providers. Others organization of municipal waste management services: allow for direct contracting of municipal companies ❚ Municipalities directly responsible for services though established for the specific purpose. Another approach municipal units. The local authority unit responsible is to engage the local authority company through admin- for service provision is not a separate legal entity. The istrative order or decision of the local council. services are implemented according to an annual plan and annual budget. In this regard the unit does not pre- The scope and procedures for the use by public utility pare a separate balance sheet and profit and loss state- companies of sub-contractors in service provision is also regulated in some countries. ment. The assets used in the provision of services are directly owned by the local authority. The personnel are For example, in Brazil, municipalities can form consortia included on the municipal payroll. The opportunity for for waste management. These consortia are independent implementing this service delivery model depends to a bodies, funded by the member municipalities to deliver large extent on the provisions of national legislation on waste services. Most consortia focus on developing and the organization and financing of local authorities. This running regional landfills, but they also have a remit to model is observed for example in the Philippines and provide collection services. For instance, CTR Maquiné, Vietnam, where the local authorities provide the service Região Metropolitana de Belo Horizonte is a 30-year proj- directly to their constituencies. ect designed to provide waste management services for the metropolitan region which includes the participation ❚ Provision of waste management services through munic- of 44 municipalities of the greater metropolitan area, and ipally owned companies. The provision of waste man- the municipality of São Sebastião. It has entered into a agement services by municipal companies is common Public-Private-Partnership (PPP) agreement for the estab- practice. Arrangements can take the form of one lishment of a mechanical biological treatment (MBT) municipal company being responsible for all waste plant139. 139 ‘‘Integrated Management of Solid Waste by Means of public-private partnerships’ v. 271, Revista de Direito Administrativo, jan./abrr. 2016 106 5 Organizational models The above models represent cases where services are shown by private sector companies in participating in organized by local authorities. In the absence of organized tenders for contracting of services, promoting compe- waste collection services, locally grown solutions, though tition in the sector, and supporting the achievement of which citizens themselves initiate cleaning activities and better contract prices that result in benefits to local res- increasingly become active players could serve as start- idents as reflected in the tariff. ing point. For example, in many countries, periodic public cleanings where residents participate for free are orga- ❚ Cooperation agreement with a lead local authority munic- nized and actively promoted. Such private or community ipality. This form of intermunicipal cooperation is com- organized initiatives have a direct impact on public aware- monly used when municipalities of different size and ness and could become the first mover catalyst for orga- capacity share common treatment and disposal infra- nized waste management services in the respective area. structure and, to a lesser extent, for the provision of col- lection services. 5.4 Intermunicipal cooperation The lead local authority in this case takes responsibil- Most waste treatment and disposal installations demon- ity for establishing treatment and disposal facilities strate significant economies of scale with rising plant which are shared by smaller local authorities accord- capacity. Achieving an economically efficient scale of facil- ing to a cooperation agreement. This form of cooper- ity operations depends on the supply of a minimum quan- ation is used for large investment projects that have tity of waste which, in most cases, is beyond the scope of a high upfront resource costs typically beyond the man- single municipality. Cooperation between several munici- agement, financial and administrative capacities of palities can therefore be beneficial for all participating small local authorities, whereas larger authorities municipalities. usually have specialized units for preparing invest- ment and procurement projects and greater financial Intermunicipal cooperation can have other beneficial pol- capacity. It is usually supported by specific provisions icy outcomes, including shared experience, compliance in the national or regional waste management plan with legal requirements, improved facilities operation, which define the role of the lead local authority. improved access to financing, streamlined monitoring, Such cooperation is also used when a large city or local etc. The main aspects of inter-municipal cooperation are authority does not have a suitable site for locating a considered below. landfill or treatment plant on its own territory but when a smaller neighboring authority does have such a site 5.4.1 Forms of intermunicipal cooperation on which a suitably sized facility could be located. A Cooperation agreement under these circumstances can The objectives, scope and forms of intermunicipal coop- be mutually beneficial to both municipalities. eration can vary considerably. In practice, intermunicipal cooperation will be successful only if it brings benefits to For example, the city Varna, Bulgaria with a population all participating authorities and if they are recognized by of 500 thousand residents established an MBT plant all participating authorities. The main forms of intermu- as PPP investment that was later extended to receive nicipal cooperation are: waste from 8 neighboring municipalities. ❚ Common procurement of services. The simplest form of ❚ Inter-municipal association. An intermunicipal associa- intermunicipal cooperation is the common procure- tion (IMA) is an advanced form of cooperation between ment of services. For example, in Romania the regional several local authorities based on agreement. There are Intermunicipal Development Associations is responsi- two forms of intermunicipal association: ble for the tendering and contracting of waste collection (i) IMA as consultative and supervisory body: In this services on behalf of participating local authorities. This case local authorities establish IMA as coordinating approach allows several local authorities to be included authority. The functions of IMA are focused on the devel- in one service contract, resulting in a larger number of opment and coordination of implementation of regional residents being served than under a single local author- waste management plans, assistance in preparing com- ity contract, and consequently results in higher-value mon investment projects, approval of common tariffs for contracts. The outcome is the higher level of interest use of regional waste treatment and disposal facilities Bridging the Gap in Solid Waste Management | Governance Requirements for Results 107 and other similar activities. The contracting of services, power plant in Skanderborg, which produces electric- ownership over capital assets, development and imple- ity and heat from the waste that cannot be recycled141. mentation of investment projects remains the respon- Similarly, in the Netherlands, small municipalities may sibility of local authorities. For example, in Bulgaria cooperate to generate large quantities of waste in order the municipalities within each regional waste manage- to reduce costs. A typical example is an inter-municipal ment zone defined by the National Waste Management company initially established in 2001 by the municipali- Plan are obliged to establish an IMA. The members of ties of Voorburg, Leidschendam and Rijswijk with approx- IDA can be only municipalities. The mayors of munici- imately 125,000 inhabitants and subsequently joined palities are represented in IMA general assembly. The by four additional local governments (Wassenaar, Delft, IMA must operate on non-for-profit basis and does not Pijnacker and Midden-Delfland). The company currently acquire property. The purpose of IMA is to support serves about 325,000 inhabitants, collecting 140,600 member municipalities in performing their responsibil- tonnes of waste with 70 trucks.142 ities, achieving agreement on common treatment and disposal infrastructure and tariffs for using such infra- 5.4.2 Regulation of intermunicipal cooperation structure. The establishment of IMA is pre-condition for providing state grant financing for local authorities. The different forms of intermunicipal cooperation are ide- ally regulated by law, although in practice national legisla- (ii) IMA with delegated responsibilities: In this case tion often does not provide specific guidance on this matter. the IMA has much broader functions as local authori- In countries where the possible forms of cooperation are ties transfer partially or entirely their responsibilities. defined in law, provisions can be general or sector spe- The IMA in this case could be responsible for organiz- cific. Provisions can be established as general require- ing and contracting waste management services, and in ments governing any form of intermunicipal cooperation, some cases implementation of investment projects of defining the responsibilities, organization, powers and common interest, including financing and ownership of financing of local authorities. Alternatively, provisions can treatment and disposal infrastructure. be formulated as specific requirements for waste manage- ❚ Intermunicipal company. Setting up an inter-municipal ment services. company to implement and operate common treatment For example, in Bulgaria the generic forms of intermunici- plant or regional landfill is another form of regional pal cooperation are defined in the Local Governments Act143 cooperation. Such a company could also be involved in and, additionally, the establishment of regional waste the provision of waste collection services. management associations, their functions and responsi- bilities are specific requirements provided for in the Waste For example, in Denmark Vestforbraending is one of the Management Act144. The established intermunicipal asso- largest waste management and energy companies ini- ciation is a pre-condition for local authorities to apply for tially founded in 1970 on a non-profit cost-coverage prin- public grant financing. In Chile, municipalities are free to ciple and owned by 19 municipalities in the Copenhagen associate, although the Strengthening Regionalisation and area and Northern Zealand. Vestforbraending provides Decentralization Act145 states that in the event of munici- waste management services to more than 950,000 peo- palities failing to reach agreement, the regional govern- ple and 60,000 businesses and handles upwards of 1 mil- ment will decide on the location of inter infrastructure. In lion tonnes of a waste each year, encountering 25 percent the Republic of Korea, the central government does not of the Danish municipal waste140. This form of cooperation provide financial assistance to treatment facilities unless could also apply on smaller scale like in case of Renosyd they are to be used jointly by neighbouring municipalities that is Odder and Skanderborg Municipality’s joint waste and are reflected in the strategic plan. company. The company handles waste from 34,000 pri- vate households and 3,000 companies. Renosyd also In some countries, legislation may contain provisions operates five recycling sites and combined heat and that limit the possibility of local authority cooperation. 140 See https://www.vestfor.dk/ 141 See https://www.renosyd.dk/ 142 Municipal Solid Waste Management: A Roadmap for Reform for Policy Makers, World Bank, 2018 143 Bulgaria SG 69/06; suppl. – SG 15/10 144 Bulgaria SG No. 86/30.09.2003 145 Chile Act 21.074/2018 108 5 Organizational models Regulation of the following key issues requires particular ❚ Despite future benefits, intermunicipal cooperation attention: agreements can entail considerable upfront costs. ❚ Does national procurement legislation allow two or ❚ Some municipalities do not respect their obligations more local authorities to organize a common procure- within the agreed cooperation framework, leading to an ment of services with the same subject? unsatisfactory and dysfunctional agreement. ❚ Is there a limitation on local authorities investing in ❚ Regional cooperation requires a reorganization of waste facilities outside their territory? management services. This can create difficulties for local authorities which have existing long-term con- ❚ Can local authorities delegate or transfer entirely or in tracts with service providers. The existing companies part their waste management responsibilities to another serving a single local authority must in some cases legal entity? cease their operations or reorganize their activities. ❚ Does national legislation allow for the establishment of The role of central government and, when relevant, regional common regional tariffs for waste services or is tariff authorities is crucial for overcoming the above problems. setting a local authority responsibility only? This requires establishing an enabling framework to sup- The lack of clear and specific legal requirements can sub- port intermunicipal cooperation, defining the scope for stantially limit the possibilities for intermunicipal cooper- partnerships between local authorities within respective ation or render them impossible. national and regional waste management plans, imple- menting effective enforcement mechanisms and providing incentives for local authorities to cooperate. 5.4.3 Incentives for stimulating intermunicipal cooperation Possible measures at the national and/or regional levels include: Despite the potential benefits for participating local authorities, it is not easy to establish intermunicipal coop- ❚ Adoption of national or regional waste management eration. Reasons for that include: plans that define the geographic areas served by regional treatment and disposal facilities. In this way, the local ❚ Not all local authorities clearly recognize the benefits authorities served by specific facilities is pre-defined. from cooperation. Quite often this is due to the lack of For example, Belarus and Azerbaijan have divided their a clear understanding of current and future waste man- national territories into waste sheds to be serviced by agement costs. regional facilities. Similarly, the island of Bohol in the ❚ Local authorities do not want to lose оor delegate their Philippines has designated zones and municipalities to powers. be served by regional facilities, this being included in the respective planning documents. ❚ If not prescribed by a national or regional waste man- agement plan, it is difficult to define the boundaries of ❚ Delegating a coordination role to national and/or regional cooperation. One local authority has several regional authorities to support and monitor cooperation neighbours and the possible alternatives for regional between local authorities. cooperation are many. ❚ Designating public investment financing for the waste ❚ Small municipalities are concerned that large local management sector for projects of regional impor- authorities will play a dominant role as partners. At the tance only and not providing support to individual same time, large local authorities that are able to organize local authorities. Having an intermunicipal coopera- waste management services without partnerships may be tion agreement could be set as an eligibility condition less concerned about issues faced by small authorities. for access to public finance. As mentioned above, this applies in many countries, including Bulgaria, Romania, ❚ Local authorities are reluctant to accept waste gener- Chile and Republic of Korea. ated outside their territories. Finding sites for regional waste landfills or other treatment facilities can be diffi- ❚ Introducing measures to support the establishment of cult and usually faces objections from local residents. common treatment and disposal infrastructure to serve Bridging the Gap in Solid Waste Management | Governance Requirements for Results 109 several local authorities, including incentives for munic- This approach requires a new regional entity to be estab- ipalities to locate facilities on their territory. Such a lished that is responsible for organizing the waste manage- measure can include granting state-owned land free-of- ment services for the whole territory. Existing companies charge for the construction of waste management facili- would cease their current waste management operations ties and creating incentives for local authorities to host and present contracts with existing service providers would be cancelled or allowed to expire. Municipal waste installations of regional importance. Incentives might collection would be organized through a regional company take the form of a surcharge levied per tonne of waste or contracted via a public tender to a private operator or to disposed of to landfill in addition to the standard land- existing companies. fill charge, with the additional funds being transferred to the host municipality to compensate it for the exter- The advantages and disadvantages of this approach are nality costs of hosting the facilities. discussed below. ❚ The major advantages of including municipal waste col- 5.4.4 Key factors having an impact on the form lection into the regional system are (i) lower collection of intermunicipal cooperation costs and (ii) a common tariff policy across the region. Two key decision points significantly influence the form Municipal waste collection organized at the regional of the institutional structure needed to implement the level can have lower total costs than if organised at the inter-municipal cooperation agreement for municipal individual local authority level. waste management. They are: ❚ A regional system makes it easier to extend municipal ❚ A decision on the scope of the intermunicipal coopera- waste collection to small settlements not presently pro- tion. That is, whether the regional scope will cover all vided with the service. services or whether waste collection/transportation ❚ Implementation of municipal waste collection at will remain a municipal responsibility. The latter point regional level requires an agreement on common ser- has implications for how the boundaries of the regional vice standard to be applied (eg types of containers, component are defined. container capacity provided per capita, collection fre- ❚ A decision on whether the infrastructure subject to inter- quency, etc.). municipal cooperation will be financed from a combina- ❚ A common tariff will most likely require significant tion of grants and loans or from private finance. This has changes to current revenue collection mechanisms. implications for the ownership of the infrastructure, its Practices such as direct operator charging are unlikely operations and tariffs. to be continued and users will make payments to a new These key decision points are considered below. regional entity. The revenues will be used to make con- tractual payments to the collection companies. A poten- Regional system includes waste collection/transportation tial difficulty relates to the fee collection ratios achieved The key prerequisite for successful intermunicipal coop- in each of the cities and settlements, especially since eration is that the financial analysis demonstrates a they affect the financial viability of the regional system. lower costs per tonne of waste managed in a regional sys- tem for all participating entities than the equivalent cost ❚ Optimisation of waste collection costs might require per tonne of each entity providing its own services. This new investment in containers and waste collection implies that a strong case can be made for having a uni- vehicles. form tariff for all users, divided into uniform collection and ❚ Organising waste collection at regional level can also disposal components. increase the interest of the private sector in the provi- Institutional arrangements for implementing this organi- sion of collection services. zational model presume that municipal waste collection/ transportation, disposal and treatment are organized at Arguments in support of a regional approach to waste the regional level and that the participating local author- collection are the opportunities it provides for reducing ities give up some of their decision-making powers and administrative costs, improving the utilization rates of col- responsibilities. lection equipment and personnel and for optimising main- tenance programmes. Organising waste collection at the 110 5 Organizational models individual local authority level is associated with higher to establish a system of transfer stations such that each total costs than if it is organised at the regional level. entity pays broadly the same cost per tonne of waste trans- ported either directly to the facility or to a transfer station. Regional systems that exclude waste collection Transfer station and haulage costs from transfer station to Participating entities may wish to retain municipal control landfill would be covered in the disposal part of the tariff. over waste collection services and to share the benefits of This effectively defines the boundary between the regional a single regional waste disposal and treatment system. In system and the municipal collection systems. For exam- this case the new regional entity is responsible only for ple, in both the Philippines and Bosnia and Herzegovina the common regional waste landfill and treatment infra- local authorities share a landfill located within and oper- structure and individual local authorities remain responsi- ated by a single municipality. The shared facility accepts ble for organising waste collection on their territories and waste from other local authorities against a fee payable for delivering the collected waste to the regional facilities. to the landfill operator. The transportation cost is born by Implementation of this model does not necessarily entail individual authorities who operate their own transporta- significant change to existing institutional arrangements tion vehicles. for waste collection. Collection organised at the municipal In another example, municipalities in Siargao, the level can be achieved without significant new investments Philippines, are considering whether to join a regional if a transfer station system is to be established within the arrangement where the landfill operator will be respon- scope of the new regional system (as discussed below). sible for long-haul collection from transfer stations oper- Although the regional solution can lead to lower average ated by local authorities that provide collection services. waste management costs, lower average landfill and treat- Initial analyses show considerable savings are made if the ment costs realised from economies of regional scale are long-haul transport is shared under regional arrangements partially offset by higher waste collection and transport rather than provided by individual local authorities utiliz- costs associated with the higher average transport dis- ing their own trucks. tances between the point of collection and the regional In addition to the decision on the scope of intermunicipal facility. Collection and transport costs for municipalities cooperation, it should also be decided whether the new relatively close to the facility are unlikely to differ greatly regional system is to be financed through grants and loans from their current costs, whereas those for municipalities (public ownership) or through private investment. As local distant from it are likely to be significantly higher. That is, authorities only rarely have the capacity to cover invest- in a regional system, collection and transport costs depend ment financing at this scale themselves, the potential for on a municipality’s proximity to the regional facility. funding project capital costs from a mix of national (and Municipalities distant from the regional facility may there- possibly international) grants and IFI debt will be crucial fore attempt to avoid such high costs by continuing to use to this decision. non-compliant sites in the vicinity of the municipality or For large waste sector investment projects, the preferred to illegally dump their waste. This has two effects: the legal structure is the creation of a single legal entity as direct adverse environmental impact of such practice and the owner of the project and of the assets created by it. the negative effect of the reduced waste flow on the pro- However, for various reasons that include financial issues, jected revenue stream of the regional facility. Appropriate historical factors and potential conflicts of interest, alter- national regulations and enforcement mechanisms should native arrangements may need to be considered. The key therefore be established that provide for all municipal goal is not only the creation of an entity capable of suc- waste generated within a regional intermunicipal cooper- cessfully applying for IFI financing but of one having the ation zone to be treated and disposed of at the designated institutional capacity to manage and sustain the waste regional facility and for severe penalties to be imposed on management system during and beyond the technical life- illegal dumping. time of the investment project. It nevertheless follows that participating municipali- Regional system financed from loans and grants ties that find themselves distant from the landfill will be unwilling to face high waste transport costs. A con- Potential sources of grant funds are central, regional and dition for acceptance of a regional landfill or treatment municipal government transfers, IFIs and domestic and facility may therefore be that all entities should face international bilateral agencies. Conditions attached to broadly equivalent collection costs. One way to do this is grant funding can impose limitations on the ownership Bridging the Gap in Solid Waste Management | Governance Requirements for Results 111 of the regional facility funded, typically requiring it to local authorities must establish the basis on which a con- remain in public ownership. tract between the entity created by the association agree- ment and the private partner will be agreed and who will Alternatives are for the landfill and related processing be the signatory to the contract. facilities to be owned by: It is also important to determine the optimal type of con- ❚ The hosting local authority tract to be used. The main types of contract used between ❚ An association of local authorities (regional entity) public and private sector partners are considered later in this chapter. For large infrastructure investments these ❚ A regional company might be a separate Design and then Build, Finance and Operate (D/BFO) contract; a Design, Build, Finance and ❚ The region (if relevant) Operate (DBFO) contract; a concession; a special purpose The optimal ownership arrangement must be agreed joint venture; or a public private partnership (PPP) agree- between the project partners. A cooperation agreement ment based on relevant national legislation. must provide for the allocation of liabilities and risks It shall be noted that local authorities usually have limited between the participating parties, and includes the allo- capacities and experience in successfully managing large cation responsibilities for the design and construction of private sector participation investment projects. Such the facilities and for project management and contracting. multi-party arrangements with long-term commitments The agreement must state the beneficiary of the funds and require a transaction advisor, mobilization of strong legal nominate the entities responsible for preparing the grant support and allocation of significant budget and time for or loan application and for arranging financial guarantees. contract negotiations and arrival at financial closure. Matters to be addressed in the cooperation agreement The contracting authority must select the optimal contract- include land ownership and land transference. ing procedure, the options for which are typically compet- itive bidding or direct negotiation, depending on specific It is also appropriate that the parties to the cooperation legal requirements. Important actions to be taken early in agreement should provide guarantees for waste quantities the planning stage are to organize the bidding process, to be delivered to the regional facilities or that alternative prepare preliminary surveys and studies, prepare bid- solutions for managing and allocating demand risk should ding documents and decide how the initial costs are to be be identified and defined in the agreement. finance. Responsibilities for contract management must The agreement should also define the tariff setting proce- be clearly allocated between the public entities involved dure followed for common infrastructure or services and, in the agreement. as relevant, indicate how the grant funded element of the The public authorities should have a clear perspective on investment financing (if any) will be treated in the cost the optimal contract duration, the estimated costs and recovery and tariff calculation process. tariffs under the contract and provisions for future price The agreement might also set out a framework in which the adjustments. The contract should also consider future host municipality is compensated for the social and envi- demand risks and propose mechanisms by which revenues ronmental effects of having the regional facility located on can realistically be protected, including minimum through- its territory. As described above, this can take the form of put guarantees if appropriate. Parties should agree on the a surcharge being added to the landfill/facility charge, the guarantees, liabilities and insurances to be provided. proceeds of which are transferred to the budget of the host An important element to be decided by the contract is municipality. the mechanism by which the contractors will be paid; for Regional system financed by private equity example, will it be based on a gate fee or a monthly fixed or variable payment made by the local authorities. If the regional project cannot be funded out of pub- lic sources (combinations of grant funds and loans) the Also, and as referred to above for publicly owned infra- option of involving the private sector in its financing, man- structure, issues concerning land ownership must be agement and operations needs to be considered. The main addressed in the private partner agreement. A specific issues to be decided in this case are considered below. issue related to municipal landfills is to define the respon- sibilities and procedures for aftercare and long-term site The intermunicipal cooperation agreement between the remediation. 112 5 Organizational models For all intermunicipal agreement options, arrangements between service components. In the absence of service must be made for how administrative and initial proj- monitoring mechanisms, bundling might also lead to issues ect development costs are reflected in the intermunicipal related to service quality, the accuracy of reported data or agreement: excess claims on volume-based services. For example, if the same company operates services for both the collection and ❚ Administrative costs to set up and maintain a regional disposal/treatment of mixed waste it will be more difficult office and carry out day-to-day functions. Resource for the local authority to account for the actual quantities requirements, costs and how they are to be funded than if the two functions were provided by separate compa- must be decided and agreed. Contributions of operating nies. When only a few contractors are available to provide funds from the participating municipalities are typically a total service, sub-contractor relationships can be devel- made pro-rata to the population served. oped by the head contractor to provide the various service components. ❚ Up-front project development costs. These are expendi- tures incurred in preparing the project to the point at Sharing services between several municipalities. The scope which it can be submitted for investment funding. They for sharing services between municipalities depends on can be significant and include: (i) technical costs for many factors, such as the alignment of objectives, the sim- site surveys, design, and environmental impact assess- ilarity of the services, the location of the common treat- ment/disposal facility, the geographic locations of the ment (EIA); (ii) legal costs for drawing up agreements, population bases (affecting economies of scale), and the contracts and bidding documents, and (iii) consultancy use and processing of recyclable materials. costs for preparing funding applications, etc. Various tender mechanisms are used for shared services148: Funding sources for these costs must be identified: e.g. funds provided pro-rata by the parties; national or regional ❚ Joint tender / contingent pricing: separate contracts are government grant contributions; and international sup- prepared for each municipality, including aligned ser- port, possibly from IFIs or bilateral donors. vices and provisions for economies of scale and consis- tency. The tenderer can price some or all contracts. If he 5.4.5 Service provision options tenders for all contracts he can offer a ‘combined con- tract’ price. Each contract is administered separately by The management of the waste stream must be considered in its entirety within the scope of the services provided. each municipality. Three service provision scenarios are outlined below: sep- ❚ Single framework contract: a single municipality enters aration, bundling and sharing.146, 147 into a contract as contracting authority on behalf of the Separating the services into several contracts. Separating the others, these being nominated in the contract to receive services (e.g. separating residual waste collection from recy- services. This form of contract cannot easily accom- clable material collection, and separating collection ser- modate differences in specification or service levels, vices from waste disposal) ensures price transparency for or political alignment. Legal redress by the non-lead each service component, retains competition between pro- municipalities must be sought from the contracting viders and supports waste recycling. A common split used authority, leading to potential conflict or disputation. by the local authorities is to separate waste collection from treatment and disposal. Division is also possible between ❚ Joint municipalities contract: a contract is awarded by all primary and secondary waste collection and between col- participating municipalities as joint contracting author- lection and waste transfer and long-distance haulage. ities. The resulting contract is managed by a manage- ment board, which takes all major operational and Bundling or integrating services within one contract. Bundling entails bringing several services under one contract. contractual decisions. Bundling of services can offer price advantages and possi- ❚ Joint venture legal entity: a municipally-controlled legal bilities for cost sharing, but can also result in cross-financing entity is formed by issue of shares to participating 146 Based on Private Sector Participation Guidelines, Environmental Infrastructure Support Programme (EISP), IMG, 2016 147 Based on Guidance Principles: Best Practice for Recycling and Waste Management Contracts, New Zealand Ministry for the Environment, Manatū Mō Te Taiao, 2007 148 Ibid Bridging the Gap in Solid Waste Management | Governance Requirements for Results 113 municipalities. A single contract is entered into by the Most waste treatment and disposal legal entity for the services the participating municipal- installations demonstrate significant ities wish to tender and administer together. economies of scale with rising plant Significant cost savings can be realised by bundling or capacity. Achieving an economically sharing services when the potential for economies of scale exists. If a number of municipalities wish to share ser- efficient scale of facility operations vices, it is imperative that each municipality has the polit- depends on the supply of a minimum ical mandate to do so. This can be formalised through an quantity of waste which, in most inter-municipal agreement signed by each participating cases, is beyond the scope of a single municipality. municipality. The key drivers of shared services are the desire to improve community services to realise social gains through exploit- ing efficiencies in service costs. The benefits can include contract owing to the need for it to satisfy all participating improved service levels, service consistency making future municipalities. regional initiatives easier to implement and cost efficien- cies accrue to both the municipalities and the contractor. 5.5 Nationally administrated waste In examining the feasibility of a shared services contract management services it is important to identify and mitigate risks. Benefits must The role of the state in the provision of waste manage- be weighed against the remaining risks and an informed ment services is limited. Nevertheless, several countries decision taken on whether a shared services contract is use state-owned companies to channel investment into desirable or if an alternative approach is more appropriate. the sector. Significant number of risks arise in shared services con- These can include: tracts. Some apply to all forms of contracts, but the levels of risk may increase with a shared services contract and be ❚ Engaging an existing state-owned company to invest in more difficult to mitigate. waste treatment and disposal. For example, the only For example, political or community resistance can result municipal waste incineration plant in Estonia was built in implementation difficulties. Customer perceptions and operated by Eesti Energia AS, a public energy com- are another important factor as some local communities pany wholly owned by the Government of Estonia. The may feel a sense of loss if their services are to be oper- plant has a capacity of 250,000 tonne/year, equivalent ated from outside of their municipality and/or by another to approximately half of all municipal waste generated municipality. in the country. Differences in municipal priorities can also reduce the ❚ Establishing a new state-owned company to invest and likelihood of any efficiency improvements and cost sav- ings. Problems can arise in the absence of a clear and operate municipal waste treatment and disposal infra- unambiguous definition of the responsibilities of the staff structure. The Solid Waste Management Company of of the participating municipalities for contract administra- Georgia Ltd established in April 2011 is a state-owned tion and management. company governed by the Georgian Ministry of Regional Development and Infrastructure. It is responsible for Inaccurate information in the contract can raise the risk of a contract variation being sought, with its associated constructing and operating all new regional landfills and cost implications. This risk will affect all municipalities treatment plants (other than in the Tbilisi and Adjara even if only one municipality is responsible for supply- regions) and for closing and rehabilitating old dump ing the inaccurate information. Under a shared service sites. Similarly, in Azerbaijan, state-owned company contract, all participating municipalities are exposed Tamiz Shahar was established as the owner of a 500,000 equally to all contractual issues, regardless of the source tonne/year waste to energy facility, a 200,000 tonne/ of the problem. year material recovery facility and a sanitary landfill, all Finally, the tender evaluation process for a shared ser- located near Baku, and with the capacity to serve the vices contract is more complex than for other forms of Absheron peninsula. 114 5 Organizational models Such measures at national government level enable cen- tralised coordination of investment programming and rapid development of treatment and disposal infrastruc- ture but also depend on significant amount of public Merkato in Addis Ababa, Ethiopia, largest open air market in Africa financing, which can probably also only be coordinated at the central level. The remaining elements of the waste management systems that underpin the supply of waste to the centralized facilities and the organization of services at the local level still need to be developed. Photo: © Demidoff | Dreamstime.com 5.6 Private sector involvement Waste management infrastructure cannot always be financed and operated entirely from national and interna- tional grant funds, loan funds or from municipal resources. Private sector involvement in the provision and operation of waste management services is common in many coun- tries, especially where public financing is limited or where ❚ Whether to establish centralised regional waste treat- private sector skills, technology, and scale is valued. ment and disposal facilities (where municipalities are Private sector participation is invaluable for mobilising obliged to use a designated publicly-owned regional investment finance and for bringing the operational expe- rience needed to provide and operate efficient services. facility) or to allow for competition in the treatment and disposal market established by the private sector A prerequisite for involving the private sector is to guaran- (municipalities tender the collection services and the tee that private companies can recover all legitimate costs responsibility for the final disposal is transferred to the (including profit) incurred in financing, constructing and private collection company). operating the services. This depends on establishing the full costs of service provision, setting tariffs on a full cost recovery basis and ensuring that the resulting charges are 5.6.1 Private sector participation affordable to users – the private sector will otherwise not Private sector participation (PSP) involves cooperation enter the market or will withdraw. between public authorities and businesses with the aim Private sector involvement focuses on: of carrying out public infrastructure projects or provid- ing services which have traditionally been provided by ❚ Delivering services that are provided less efficiently by the public sector. It typically involves complex legal and the public sector financial arrangements, and is widely used in the trans- port, public health, public safety, water and waste man- ❚ Activities where new technologies are needed (e.g. agement sectors. municipal waste treatment and recycling) The broad aims of PSP are to structure the relationship ❚ Services that consume significant proportions of munic- between the public and private sectors so that risks are ipal investment and operations budgets borne by the party best able to manage them at least cost. Increased value for public services is achieved by exploit- Key issues to be decided are: ing private sector skills and resources. Hence, private ❚ Whether to define some waste management activities as sector entities become long term providers of facilities primarily public responsibilities (and eligible for grant and services whilst public sector agencies increasingly funding) and others for implementation on a fully com- become focused on regulation, service planning, contract mercial basis by firms (public and private) competing on management and performance monitoring. See Box 14 on a fair and open basis a waste-to-energy PPP project from Serbia and Box 15 on a DBOF scheme from Morocco. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 115 Box 14 Belgrade waste to energy PPP project149,150 Belgrade Waste-to-Energy (WtE) was designed to close and competitive dialogue procedure in five rounds. remediate the Vinca landfill, Europe’s only remaining open This approach allowed for exchange of information in refine- dumpsite and a major environmental and social concern for ment of facility design and for defining PPP boundaries the Serbian capital and its residents. One of International in distribution of project risks between the public and pri- Finance Corporation’s (IFC) first investments in the waste- vate partner. The design, construction, and overall perfor- to-energy sector, it is the first privately financed, large-scale WtE project in the Balkan region and among the largest PPP mance criteria were assigned to the selected private partner, transactions in Serbia. It is also a first-of-its-kind PPP project whereas the municipality of Belgrade had to secure con- supported by IFC and the Multilateral Investment Guarantee nection to the heating system and land rights. As the city is Agency (MIGA) with 260 million Euro in financing and guar- also responsible for waste collection, it realized a payment antees, including blended finance. scheme, which covered the public partner’s financing and fixed operation costs. The final price of the project was 350 Over four decades, Vin a has received more than 10 million million Euro. tonnes of waste, with just one year of capacity remaining at the time of investment. With piles of waste towering as The final PPP contract was signed between the City of Belgrade high as 70 meters, landslides were a risk. Methane emissions and a consortium of Suez – Itochu, under the shared special ignited fires, polluting the air over Belgrade, and trash was purpose vehicle Beo Cista Energija d.o.o. (BCE). The newly approaching dangerously close to the nearby Danube River. created vehicle would receive 20-25 percent of the financing from its two partnering firms, with the remaining 75-80 per- Over the next several years, the dumpsite will be replaced by cent coming from international funding organizations such as three new facilities: A sanitary landfill in compliance with EU IFC and EBRD. The generated income from the project would standards, a waste-to-energy plant producing renewable heat be used to reimburse the investment of BCE. and power from municipal waste and landfill gas, and a pro- cessing facility for construction and demolition waste. Financing of the project by the city was designed in such a way that 60 percent of the total project revenues would be Upon completion, the project is expected to provide enough paid readily with the remainder being subject to fees coming electricity to reach approximately 300,000 households, in from the energy and heat sales. In order to fund such avail- addition to 80 percent of the heat needed by the City of Belgrade ability payment, City will need to increase the waste disposal in winters. The heat and power production will replace dirty charge applied to households and businesses, currently at fossil fuel generation, reducing an average of 354,200 tonnes the level of 2 Euro/month/household. It has been calculated per year of greenhouse gas emissions between 2021-2051. The that the increased charge would not exceed 1 percent of the WtE facility would treat 340,000 tonnes of municipal waste average household expenses, which is considered within the per year, with the residues and any excess waste sent to the affordability range. sanitary landfill for additional biogas extraction. The electricity feed-in tax was set at 86 Euro/MWh along with In order to carry out the project the City of Belgrade decided an agreement with the national power operator for a duration to rely on a non-recourse project finance, suitable for large of 12 years; this would provide approximately 30 percent of PPP projects, which proposed the operation of facilities for annual revenues. The price of the heat was designed at 30 the duration of 25 years. Due to the lack of know-how in car- Euro/MWh with a secured 56 MWh during the winter seasons rying out such vast projects, the city administration was over the entire project duration, which would add the addi- assisted by IFC during the project preparation process and tional 10 percent of project revenues. selection of private partner. With the support of external con- sultants in preparing project documentation an international MIGA guarantees of 97.3 million Euro are being provided tender was organized. The finalization of selection process for up to 20 years against non-commercial risks, including took approximately two years. Five potentials bidders were breach of contract. The guarantees cover up to 90 percent of pre-selected and the final contract was awarded following investor equity in Beo ista Energija d.o.o. 149 Heddesheimer, S., Thevenet, V., Kervenoael, M., Dendoune, S., Belgrade Public – Private Partnership – How the private sector helps in converting Belgrade Dumpsite into and Integrated waste management facility, 2018 150 Belgrade PPP project - How the private sector helps in converting Belgrade Dumpsite into and Integrated waste management facility, SUEZ, 2018 116 5 Organizational models Box 15 Morocco Oum Azza provincial landfill151 The Oum Azza provincial landfill was developed as a PPP first 4 years of the start-up phase to ensure financial viability. under the form of a Design-Build-Operate-Finance arrange- In 2010, a MRF was added to the landfill under the same ment. The facility serves 13 communes of the Rabat-Salé- agreement. It was equipped with 2 sorting lines with a capac- Skhrirate-Temara Province, representing a total population of ity of 215,000 tonnes per year, generating 5,000 tonnes of 1.98 million. recyclable plastics each year. This facility was the first of The contract was signed with SEGDEMA, a subsidiary of the its kind in the Kingdom and can process an average of 400 French leading operator Groupe Pizzorno Environment (GPE) tonnes per day. and largest waste management operator in Morocco. The con- Rejects amount to 40 percent of throughput and are further tract started in February 2007, for a duration of 20 years. It transferred to a plant producing RDF for a cement plant oper- included the construction of a modern landfill equipped with ated by Lafarge Holcim. 90,000 tonnes are transformed into landfill gas capture and flaring, leachate treatment, as well as RDF each year. sorting facility to separate wet waste from dry waste. The ini- tial design capacity was 500,000 tonnes of mixed waste plus Green waste is shredded to produce compost, sold as fertil- 120,000 tonnes of garden waste per year. izer for agriculture. As part of the contract, SEGEDEMA had to build 3 trans- The facility provides jobs to 153 workers, formerly informally fer stations and reclaim the old dumpsite under a separate scavenging waste on the old Akreuch dumpsite. The workers agreement. were organized as a cooperative named Attawafouk and are remunerated by the proceeds from recyclables sales. A buy- Under the agreement, the operator financed the construction back agreement with the landfill operator guarantees a stable and operation of the facility, charging a gate fee of MAD 70 income to the cooperative. per tonne, equivalent to approximately USD 7.0 per tonne of incoming waste. The fee is intended to cover the initial invest- The substantial improvement of waste treatment and dis- ment (USD 35 million) as well as operating expenses (USD 7.5 posal in Rabat since 2007 has benefited from the know-how million). Transfer and transport fees are charged separately and technology brought by the private operator. However, at USD 3.0 per tonne. in July 2020, the operator announced it would seek contract termination after 15 years of operation following a disagree- The Government provided the land - approximately 250 acres ment with the client over leachate treatment. of farmland - and a subsidy of USD 10 million spread over the The text box summary is based on publicly available design documentation and implementation reporting. 151 5.6.2 Potential benefits and risks of PSP to plan and manage public service provision efficiently within tight budgetary constraints. PSPs can bring higher efficiency through competition, accountability and transparency, and can also provide Potential sources of ‘value for money’ from PSP contract- access to expert skills and know-how on implementing and ing arise from: operating projects. ❚ Optimal risk transfer Introducing private sector expertise, know-how and ❚ Long contract duration (full-life costing) investment finance can improve service quality and mini- mise total costs over a project’s life. Competition between ❚ Clear output specifications in the tendering process private firms and an optimal allocation of risk between public and private parties provide strong incentives for ❚ Contract performance measurement private contractors to perform to contract specification. ❚ Private sector management skills It can accelerate infrastructure and service provision and lead to improvements in the capacity of public agencies ❚ Competition Bridging the Gap in Solid Waste Management | Governance Requirements for Results 117 To be successful, decisions to involve the private sector ❚ The outputs of the service can be defined, measured and in the provision of environmental services must be based priced easily on detailed analysis and clear and unambiguous out- put specifications. The successful involvement of the pri- ❚ Costs of the service can be defined in full and recovered vate sector requires a realistic allocation of project risks largely or fully through user fees between the private and public parties to the contract. A ❚ The service offers scope for innovation detailed appreciation of total life-time costs and financing requirements, including tariff and revenue implications is ❚ There is a track record of partnerships between govern- important. ment and the private sector Also, public agencies need the capacity (powers, resources Certain prerequisites must be satisfied if a PSP arrange- and expertise) to manage a competitive contract prepara- ment is to be properly structured, implemented and sus- tion, procurement, management and regulatory control tained. A supportive legal, institutional, financial and tax process. framework is of primary importance, and the procurement framework must specifically provide for competition. The In the absence of such safeguards – and depending on public authorities must have the capacity to prepare, pro- the type, scope and scale of the contract – the potential cure, manage and monitor PSP contracts efficiently. In risks of PSP can be significant. They can include the loss addition, national and local waste management strate- of public sector control (and reduced transparency and gies and plans should be sufficiently well developed and accountability in service provision), negligible benefit integrated to enable potentially viable PPP projects to arising from competition, labour relations problems, high be clearly and unambiguously identified and defined. A costs and unaffordable tariffs. Disputes and litigation can proven tariff setting mechanism and operational charging lead to a fall in service quality or efficiency, and the loss of system based on the full recovery of service costs is also social and political support. an important pre-condition for private sector involvement. Contracting with the private sector requires fundamental change in municipal organisational arrangements and in 5.6.4 Types of PSP contracts the roles, responsibilities and attitudes of municipal staff. From being a service provider the municipality shifts to PSP is a contractual arrangement between a government being a contract manager. This is a significant change in entity and a private firm for the delivery of an infrastruc- emphasis and function, and the reorganisation and reallo- ture facility or service. Contractual commitment reflects cation of municipal responsibilities must be planned and the level of a contractor’s involvement in designing, con- implemented well in advance of the start of private sector structing, financing, operating and owning the assets cre- operations. ated and/or used to provide a service. This reflects the measure of risk the entity is prepared to accept. This, in turn, influences the level of financial return he expects for 5.6.3 When should PSP be considered? accepting the risk. This also has a bearing on other factors, The participation of the private sector should be consid- including contract duration and payment terms (which ered when: determine the contractor’s ability to cover his costs). Contract intensity, duration and risk rise as the private ❚ The service cannot be provided with the resources or entity accepts increasingly higher levels of responsibility. expertise of the public sector alone Factors that define the forms of PSP contract include how ❚ The involvement of the private sector is likely to increase responsibilities are divided between the private and pub- the quality or level of service, or enable it to be imple- lic partners and respectively how risk is allocated between mented sooner the parties. What will be the financial compensation of the private contractor and how it is generated are of primary ❚ There is scope for effective competition among prospec- importance. The duration of the contract, asset owner- tive private sector suppliers ship and transfer to the public entity and how the capi- ❚ There is broad support from service users for the involve- tal expenditures are financed also affect the cooperation ment of the private sector model. 118 5 Organizational models Six generic forms of PSP arrangement that reflect rising levels of responsibility, risk transfer and expectations of financial return are described below. ❚ Outsourcing (management or service contracts, fran- chise): A private firm is awarded a fixed-term contract to manage / operate a specific facility or service for an agreed period of time (e.g. municipal waste collection). It neither constructs nor finances the facilities. A tech- nical specification defines the services to be performed. The contractor operates and maintains fixed facilities owned by the public agency. Such arrangements limit the entrepreneurial scope of the contractor as they remove his capacity to define the type and efficiency of Recycling center technician. Photo: Portra the equipment used. Mobile equipment can either be owned by the contractor (e.g. waste collection vehicles) or by the public agency (e.g. landfill equipment). Under the service contract a direct payment is made by the pub- lic agency to the firm. A variation is the franchise con- tract where the public authority transfers responsibility and risk of customer billing and revenue collection to the contracting party. In the franchise example, the con- tracting authority awards, via competitive tendering, a limited monopoly to a private company to deliver a via a contract with the public agency. Assets are trans- particular solid waste management service, in a defined ferred into public ownership at the end of the contract area for a fixed period. The contractor is responsible for period. Examples are, BOT (Build, Operate, Transfer) fee collection from householders and other users and BOOT (Build, Own, Operate, Transfer) and DBFO (Design, has to consider late payment and bad debt. Build, Finance, Operate) contracts, but the terms tend to be used interchangeably. ❚ Lease Arrangements: A private firm is awarded a contract to operate and maintain a utility system for a munici- ❚ Concession: A private entity is granted an exclusive right pality, usually funded from user charges levied and col- by a public agency to manage, operate, finance and lected by the lessee. The firm leases the utility’s assets maintain the assets of an entire pre-existing infrastruc- from the public agency and takes responsibility for ture system over a specified period. operating and maintaining them. Leases can be admin- ❚ Private ownership: arrangements through which a pri- istratively complex to organise and represent a far big- vate entity finances, operates and owns a facility or ger step for the public sector than outsourcing. service outright in perpetuity: assets are not trans- ❚ Design, build and operate contracts (non-finance): A sin- ferred into public ownership at any stage. Examples are gle private entity is awarded contracts to design, build BOO (Build, Own, Operate) contracts and divestments/ and operate publicly-owned assets (such as a materials privatization. sorting plant). No long-term commitment is made by the There are no legal or universally accepted definitions for private entity to finance capital investments. Examples these contract categories and types. Names and acronyms are DBO (Design, Build, Operate) and BTO (Build, can differ between jurisdictions, even though the type of Transfer, Operate) contracts. contract is fundamentally the same. ❚ Private finance and transfer contracts: A private entity The following table considers in more detail the three designs, builds, finances, operates and owns assets for most commonly used contract types: service contracts, the length of a contract period. Investment is recouped DBO contracts and DBFO contracts. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 119 Table 6 Key characteristics of service contracts, DBO contracts and DBFO contracts152 Key factor Service contract DBO DBFO Type of Service contracts are typically used With a DBO contract, a single contract DBFO contracts are similar to activities for waste collection, waste transport/ is awarded to a single private entity DBO contracts with the important transfer, sorting and landfill for the design, construction and distinction that they include operations. operation of a facility, such as a investment financing. They are used sanitary landfill, transfer station in large, complex projects, such as or waste treatment facility. The an integrated waste management contractor first designs and builds a facility. They are complex and time facility to public sector performance consuming to prepare. standards and then operates and maintains it for a predetermined period. Contractual The technical specification defines The contract specifies the tasks A single entity bids to design, relationship the service to be performed by the to be performed. The contracting construct, operate, maintain and contracted firm (e.g. waste collection authority covers investment finance a facility or service during in a specified collection zone) expenditures through progressive the contract period. Contractual payments to the contractor over responsibility rests with a single the design and construction phase. DBFO entity. The facilities are Thus, a DBO contract creates a transferred back to the public entity single point of responsibility for at the end of the contract period. design, construction and operation. The facility remains in public ownership for the entire contract. Legal ownership is transferred to the sponsoring public agency once the facility has been commissioned. Payment The public agency pays the contractor The contract specifies a guaranteed The private entity is compensated for the services provided, either on a payment schedule over the contract by service payments made by the unit basis (e.g. the quantity of waste period. The contractor can thus contracting authority from the point collected) or on a lump-sum basis. In expect a reliable and predictable at which the contracted facility some cases the contractor also has revenue stream, subject to meeting is available for use. The entity responsibility for – and bears the risk the service requirements may demand guarantees from the of – billing and fee collection. public body, such as a ‘take or pay’ arrangement (i.e. payment may be independent of the quantities of waste delivered to a plant). Based on Guidelines for Successful Public – Private Partnerships, European Commission, DG Regional Policy, 2003 152 120 5 Organizational models Table 6 Cont. Key factor Service contract DBO DBFO Ownership The contractor operates and In pure DBO contracts, title to the DBFO may include temporary and maintains fixed facilities owned by facility lies with the contracting ownership by the DBFO entity of the investment the public agency. Such arrangements authority, which is also responsible facility during its operational life limit the entrepreneurial scope of for the investment. Capital but it reverts to public ownership on the contractor as they remove his expenditures on the facility are completion of the contract term. capacity to define the type and typically made in the first instance by efficiency of the equipment used. the private contractor, which is later Mobile equipment can either be reimbursed by the contracting agency owned by the contractor (e.g. waste in accordance with the contractual collection vehicles) or by the public terms. Public funding can be via agency (e.g. landfill equipment). grants from international donors or loans from international banks. Mobile equipment needed for landfill operations, for example, is typically provided (owned and financed) by the DBO contractor, which will receive appropriate financial compensation to cover operational costs (e.g. a defined payment / tonne of waste disposed of to landfill). Contract The contract period (for all contract Facilities covered by DBO contracts A long contract period is necessary, period types) is determined by the length tend to have relatively long lives. typically 15-25 years and above. of time needed for the revenue of Landfills typically have operational the facility or service to pay off the lives of 15-25 years. In this case, the firm’s debt and provide a reasonable contract must recognise and provide financial rate of return for its for the construction and financing efforts and risks. This is typically of new cells needed over landfill life 5 to 8 years for service contracts. (e.g. in 5-yearly stages). Similarly, Contract periods shorter than this it must recognise and provide can introduce uncertainty and lead for landfill closure and aftercare. to inefficient outcomes concerning The aftercare period over which equipment selection, quality and management and monitoring costs performance. Unreasonably short must be met by the site owner can be contracts make it unattractive for 20-40 years. It must also specify the a firm to invest in cost-effective asset maintenance and replacement equipment as they introduce the schedules that apply to other waste risk of the contract being terminated management facilities (e.g. MBT before the equipment can be fully plants). depreciated and financing costs covered. This can lead to higher unit costs of service. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 121 Table 6 Cont. Key factor Service contract DBO DBFO Risk The contract typically specifies Risk associated with facility design, A DBFO contract means that the allocation the level of fees to be paid by the construction and operation is private party bears both the design contracting authority to the service transferred to the DBO contractor. and construction risk and either the provider. The contracting authority The contractor bears none on the availability risk or the demand risk: thus bears the revenue risk of investment financing risk and can for waste projects, the public sector securing fee collection from service proceed in the expectation of a will normally take the demand risk users (or via financial transfers reliable and predictable revenue under, for example, ‘take or pay’ from the municipal budget). The stream. provisions. contractor, on the other hand, DBO contracts are exposed to issues Given that investment financing is a bears the operating risk. Service regarding asset maintenance and task of the contractor, he has to carry quality consistent with the technical asset replacement. considerably higher risks than those specifications has to be achieved if which apply to a DBO contract. He the contractor is not to face financial will not receive a payment in parallel penalties (all else being equal). to the construction (as is applicable Such contracts are exposed to the in a DBO contract), but has to charge risk of the risk allocation profile for his investment during the whole agreed in the contract being violated lifetime of the facility by requesting by the public agency, either by a defined payment for each tonne. delaying or suspending service He also has to carry risks related to payments on account of municipal unpredicted interest or inflation rates. budget constraints. This effectively The appraisal and implementation of transfers financial risk to the service DBFO projects are time-consuming provider, leading to disputation and and expensive exercises. This is why litigation which can seriously disrupt potential contractors must be able service provision. to assess quickly whether a project Contractual difficulties can also is commercially feasible under the arise when the parties cannot agree proposed arrangement. on whether expenditure should be The implementation of DBFO contracts made on asset maintenance or on is strongly dependent on political asset reinvestment. This can also risks related to specific country: leads to disputation, litigation and economic stability, political will and service disruption. Having the private capital markets contractor responsible for levying and collecting charges from users The private entity must be able to transfers financial risk from the show that the project will generate public agency to the contractor. This sufficient revenue to repay loans raises significant issues: whether and provide a reasonable return to private firms are prepared to bid investors. The project must be large for such contracts; the level of tariff enough to secure the development needed to compensate the contractor capital and the timeframe long for accepting this financial risk. enough for the contractor to generate revenues. The public sector client must be able to honour the agreed payment terms to the contractor. This is crucial because such payments constitute the only source of income for repayment of project loans to banks and dividends to investors. The client’s credibility to honour its payment obligations will influence investor and lender confidence in the project. 122 5 Organizational models Once the scope of the services to be procured is defined Contract intensity refers to the extent to which functional the municipality must decide on the most appropriate con- responsibility, risk acceptance, financing and ownership tract model to use in procuring the services. are transferred from the public sector to the private con- tractor. As contract intensity grows, so does the response Residual waste collection, separate waste collection needed from the public sector to address the structural and recyclable material sorting are typically procured adjustments and provide the capacity needed to effectively through service contracts. Waste treatment and disposal prepare, manage, monitor and regulate such contracts. infrastructure consisting of long-lived assets is typically procured via DBO or DBFO-type contracts. The various The allocation of responsibilities for various PSP options contract models differ in terms of contractual obligations, is indicated in the following table. risk sharing and contract duration. Table 7 Allocation of responsibilities for various PSP options153 Contract Type Asset ownership Operations and Capital investment Commercial risk Duration (years) maintenance Service Public/Private Private Public Public 4-8 Management Public Private / Public Public Public 3-5 DBO Public Private Public Shared 15-30 DBFO Public Private Private Private 15-30 BOO Private Private Private Private Indefinite Divestiture Private Private Private Private Indefinite 5.6.5 Risk allocation that result, for example, in wrong decisions being made on capacity requirements, leading to poor operating per- Although PSPs are well established as a public procure- formance, higher costs and revenues lower than planned. ment method, their benefits depend on how the private sector manages the risks transferred to it and on the Significant risks are associated with the design and con- success of the public sector in supervising the contract. struction phases that can lead to delays, non-performance Government agencies have a critical role to play. PSPs are of facilities and increased investment costs. neither a panacea for successful and efficient public ser- Risks during commissioning and facility operation should vice provision nor a substitute for strong, accountable and also been considered as they can affect plant availabil- effective governance. ity, operation and maintenance costs, the achievement of planned objectives and performance indicators and, in the Each stage of planning, designing, constructing, financing worst scenario, can cause damage to the installation. and operating a facility or service involves risk of some form or other. Financial risks are usually of primary importance for the private partner, particularly the revenue risks asso- The political risk is typically the first a company will con- ciated with demand, user charges and charge collection sider before investing in a country or sector. Consideration performance. will be given especially towards the risk of unfair compe- tition, and unequal treatment of market participants from Waste management operations and facilities containing a the public and private sectors (e.g. for financing and cost significant recycling or materials recovery component face recovery). market risks associated with the quality and quantities of separately collected or sorted materials, compost or RDF, The lack of reliable information can lead to socio-eco- the availability and long-term consistency of markets, and nomic data and waste and material flow projection risks the volatility of market prices. Based on World Bank Mediterranean Environmental Technical Assistance Programme (METAP) Solid Waste Management Project, Private Sector 153 Participation Guideline, prepared by GTZ – ERM – GKW, 2002 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 123 Changes in legal requirements can create regulatory risks. A broad aim of the PSP contract is to structure the relation- In a similar way, compliance risk also faces existing facil- ship between the public and private sectors so that risks ities and installations. The issue is particularly important are borne by the party best able to manage them at least for landfill operations where responsibilities for previous cost. This is a crucial and time-consuming part of contract (public) activities and future private operations should be preparation. The table below indicates how major contrac- clearly divided. tual risks might be allocated between the public and pri- vate partners. Table 8 Major risks and how they might be assigned154 Type of Risk Indication of how to assign the risk Waste Management Data Waste management data on quantity and quality need to be assessed, described and predicted carefully and Predictions during the preparation of the bidding documents (population growth, increase of waste quantity). The Contracting Authority should be responsible for these data. Clauses relating to the adjustment of payments for adjusted waste quantities should be included. (e.g. payment based on unit prices for each tonne of waste collected and disposed of or for population growth.) Operation Risks Under a service contract operation risk is assigned to the Contractor. He is obliged to fulfil the contractual obligations and must cover the related risks (especially cost overruns, exceeding agreed operating costs). A condition of the contract is that the Contractor himself and his subcontractors have adequate liability insurance to cover these operational risks. This must be supported by verifiable evidence. Operational standards (traffic, health and safety, environmental protection) and performance standards should be well justified and defined. Penalties should be imposed in the event of standards being violated or of a failure to meet quality specifications. Revenue Risk For contracts in which the contracting authority pays the contractor for the provision of services or works the revenue risk is assigned to the contracting authority. Cost recovery must be assured by the contracting authority, defined by cost calculations and secured through the collection of taxes or charges during the project implementation period. Services that are not affordable to the contracting authority and its customers should never be tendered! Making the contractor responsible for fee collection will result in considerably higher costs per unit owing to bad debts and late payments. Financial Risks The financial risk of unpredicted rises in interest rates and inflation should be shared by the contracting authority and the contractor. Respective clauses for price adjustment should be included. Legal Risk Legal risks, such as changes to national or local government legislation (e.g. to impose higher standards or to introduce new or higher taxes) which lead to considerable additional costs for the contractor should be assigned to the contracting authority as the private sector has no ability to influence them. A clause including options for comprehensive claims and negotiations should be anticipated. The legal risks for the private partner could also be tied to the legal procedures for settlement of contractual issues in the case that the public counterpart doesn’t meet contractual obligations, especially if the matter must be addressed in a national court. Residual Value Risk Residual value risk is an important factor for privately financed projects in which ownership is transferred to the public sector at the end of the concession period. The physical condition of the facility, and the quantity and quality of its outputs (e.g. a materials processing plant) at the time of transfer must be clearly identified in the contractual agreement. In particular, a schedule of operation and maintenance requirements and their timing is agreed. Based on World Bank Mediterranean Environmental Technical Assistance Programme (METAP), Regional Solid Waste Management Project in Mashreq 154 and Maghreb Countries, Regional Guidelines, Volume 4 Private Sector Participation Guidelines and Aids to Implementation, prepared by GTZ – ERM – GKW, 2004 124 5 Organizational models 5.6.6 Contractual relationship between public the private sector. It is also strongly recommended that and private partners toolkits for project preparation, service tendering, con- tract performance monitoring, and basic economic regula- For a PSP project to be successful, both partners must tion of the sector should be prepared. have the same understanding of the scope and quality of the services to be provided, the tendering procedures Equal treatment of public and private sector providers and the type of PSP contract to be used. They must also be of waste management services must be guaranteed via aware of the contractual risks and the approach through a common tariff determination policy and contracting which such risks will be minimised and assigned appro- procedures. priately between them. Only by clearly defining and undertaking a thorough anal- A thorough understanding of the full commercial costs of ysis of each contract item can a contract be prepared providing waste management services, and of their impli- which satisfies both parties and which can realistically be cations for the level and affordability of user tariffs, is a expected to achieve the project aims in an effective, cor- crucial requirement of municipalities preparing proposals rect and fair manner. for possible private sector involvement. Depending on the type of contract, contract clauses dif- A clear specification of the works and services to be pro- fer considerably in terms of ownership, responsibility for vided under each project phase is crucial. Rules, regula- investment, operation, share of risks and contract dura- tions, standards and norms subject to change over a long tion. Although some issues are common to each type of contract period must be identified and the contractual contract, other specific issues arise with increasing levels responses to such changes defined. of contract complexity. Some of the more common ‘critical contract issues’ are outlined in Box 16. Standard procurement procedures and contract templates are needed to support local authorities in contracting with Box 16 Critical contract issues155,156 Contract period. All contracts with the private sector should The very short periods of 1 or 2 years for waste collection con- be of sufficient duration to make them bankable – that is, tracts are not recommended. they should be for a period which is long enough to enable the contractor to service the finance that he has organised The periods for contracts that involve construction and oper- to purchase the equipment or refinance the facilities for the ation of facilities are considerably longer, from 15 to 25 years work. Appropriate contract periods increase the attractive- or more. A 10-15 year term is considered suitable for a mate- ness of the work for private sector participants and lower the rial recovery facility. Contract periods of 15 – 25 years apply costs considerably. Generally, the contract duration should to waste treatment plants and landfills. not exceed the lifetime of the longest-lived assets envisaged Longer contract terms are allowed on an exceptional basis for private investment. For equipment needed for waste col- for investment-heavy contracts, provided that the expected lection, waste transport or landfill operations this is likely to life of major assets subject to contract is significantly lon- be a period of 5-8 years. Durations of 15 – 30 years agreed ger than specified period. In this case, a provision for peri- in contracts signed between some municipalities and private odic review of the contract clauses is usually written into the operators for waste collection services are disproportionally contract. If the contract duration is considerably shorter than long relative to the life of the assets used (containers, col- the expected lifetime of fixed assets then a provision can be lection vehicles). Contracts of this length are entirely unnec- made in the contract for the municipality to compensate the essary as by creating effective monopolies they remove the contractor at the end of the contract period for the resid- competitive pressures and incentives needed for the contrac- ual value of any fixed assets. Longer-term contracts can also tor to remain efficient and cost-effective. Ibid 155 Based on Guidance Principles: Best Practice for Recycling and Waste Management Contracts, New Zealand Ministry for the Environment, Manat M Te 156 Taiao, 2007 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 125 Box 16 Cont. contain provisions that set specific contract review dates or changes can be anticipated and addressed in advance in the which enable the contractor / contracting authority to initi- contract specifications the easier it will be to reach agree- ate a review at any time over the contract term. This provides ment on them during the contract period. the opportunity for improved technologies to be introduced, Contract extension and termination. Contracts that contain at the initiative of either party. The reviews also encourage provisions for periodic extensions are far less appropriate investment and upgrading of plants. A disadvantage concerns than contracts that define long contract durations (but which the potentially large capital investments involved, the need provide for early termination in the event of unsatisfac- for this to be amortised over a relatively short timeframe, and tory performance). Contract extensions should be limited to the impact of this on the contract price. unforeseeable circumstances, such as force majeure events. Start of operations. The start of operations should be clearly Reasons for early termination of a contract, by either the con- defined and must take account of the complexity of the con- tracting authority or the contractor, should be clearly defined. tract and the necessary preparatory measures and actions. Although this should be a rare exception, there may be cir- The more complicated the contract, or the length of time cumstances when a contracting authority has to terminate a needed for equipment supply, the longer the period between contract, such as for fundamental changes to waste manage- contract signing and start of operations. The contract should ment policy. A clear procedure must be defined and applied recognise the possibility of delays in supply owing to circum- in such circumstances. This might include obligations to com- stances beyond the contractor’s control. Examples include pensate the contractor for reasonable and justified losses. customs clearance and the acquisition of permits. For com- Other default events which allow the contracting authority to plex contracts, such as collection contracts which cover terminate the agreement without compensation can include several collection zones, a step by step approach might be insolvency or bankruptcy, serious breaches of the contract, needed so that operations can be introduced progressively on etc. The option for the contractor to terminate the contract a zone by zone basis. If there is an incumbent operator, then should broadly be restricted to the failure of the contracting it is also important to allow time for operations to be trans- authority to pay the contractor according to the contractual ferred smoothly from one operator to another. terms. Allocation of key risks. Sound project preparation and a Measurement and payment. Payments in general should be well-defined contract can help reduce risks considerably and linked to a measure of the work completed in combination achieve low and fair prices. As noted above, risks should be with a defined unit price for all types of contracts. Unit prices assigned following a clear identification of the party with the are usually a better solution than lump sum prices. For con- greater level of control over the risk. A detailed risk analy- tracts of longer durations, a fair price adjustment clause sis should be performed during preparation of the contract should be included. Contractors are highly motivated if pay- documents. ment is made punctually, according to the time schedule defined in the contract. Requests for additional services and adjusted framework con- ditions. In the event of additional services being requested Penalties and incentives. Well-defined performance stan- by the contracting authority after contract award, or of a dards can reduce the possibility of conflict between the par- change in the legal framework, a fair mechanism is needed ties. Penalty clauses are intended to enforce the provisions to adjust prices. An example is a decision to change the site of the contract (not to reduce the costs to the contracting proposed for a disposal facility as part of a collection contract authority). In general, penalties should be capped in order that leads to longer transport distances and higher transfer to avoid misuse. The penalty regime is not designed to cover costs. This will affect the Bill of Quantities rates. As a condi- all cases of bad performance. In particular, clauses on per- tion of its approval, the contracting authority will establish formance guarantee (or bond) and on early contract termina- a right to inspect records that show the need for an adjust- tion are intended to cover instances of critical or extensive ment to the Bill of Quantities rates. Such negotiations might poor performance. Incentive clauses are intended to encour- be simpler if, at the tendering stage, unit prices for additional age the contractor to maintain a high level of performance services are drawn up. These can include unit prices for incre- and to motivate him, especially if the solid waste manage- mental transport distances, or unit rates for day works (e.g. ment services are not yet fully developed and require contin- for vehicles, machines and workers). The more that potential uous improvement. 126 5 Organizational models Box 16 Cont. Guarantees. In a typical service contract in which the con- indicators (KPIs). KPIs can be based on either incentives tractor is obliged to provide and finance his equipment, the for good performance or penalties for poor performance, need for the contractor to lodge a performance bond should although incentives are the preferred approach. The objec- be carefully considered in terms of the risks assigned to tive of KPIs is not to structure or assess them to score the both parties. There are two reasons for seeking a bond: one contractor down to save money. The emphasis is on assess- is to ensure that the contractor performs according to con- ing performance by the quality of service delivery. The set of tract specification and the other is to ensure the contracting KPIs should be limited in number, specific, measurable, easy authority receives some form of compensation if the contrac- to administer, transparent, objective and agreed. The content tor walks away from his obligations. The contracting author- of KPIs varies with the contract service, but generally waste ity must consider that the bank that issues the bond will want management contracts cover performance for most of the fol- payment, a cost ultimately to be covered by the contracting lowing: customer satisfaction, quality of the service, health authority. Here, an option might be to limit the duration bond and safety, compliance with legislative requirements, rela- to the first year following contract signing to cover the start tionships with other stakeholders, reporting, maximisation of operations and critical service implementation. A typical of diversion of waste from landfill, minimisation of waste dis- value for the performance bond is 10 percent of annual con- posal costs. tract value, although this is fundamentally determined by how risks are allocated between the two parties. The situ- Dispute resolution and arbitration. Involving the private sec- ation is quite different when operational equipment is pro- tor introduces the potential for conflict. Two common reasons vided by the contracting authority. Here, a performance bond are difficult or inadequate framework conditions and the lack is needed to ensure that the contract is fulfilled according to of experience on the part of the contract parties. Conflicts the specifications and to cover the risks borne by the contract- range from disputes over technical performance (e.g. achieve- ing authority. The same situation occurs in DBO or construc- ment of performance targets, reliable provision of services, tion contracts in which specific works must be performed. timely commissioning of facilities) to financial issues (e.g. reaching agreement on an amount to be invoiced, punctual Performance Standards and Contract Monitoring. Minimum payment by the contracting authority). Conflict avoidance is acceptable levels of performance relative to a Service best achieved through clear and unambiguous technical spec- Specification or a Technical Requirement must be defined and ifications and contract clauses. However, even when technical details provided on how they will be monitored. Note that specifications and contract clauses are as clear and reason- not all works can be carried out perfectly to specification all able as possible, appearance of disputes and need for arbitra- of the time. Human errors do occur, a fact that should be rec- tion is still possible. In case that a dispute cannot be solved ognised and dealt with in the standards in an acceptable way. in mutual consultation between the two contract parties, the Regarding monitoring, it is important to set out clearly how contract could envisage engaging an experienced and compe- the work will be monitored. It could be done by a contract tent adjudicator to improve the prospects of early resolution monitoring unit, with relevant procedures applied by the without recourse to formal arbitration proceedings. If such contracting authority. Alternatively, a self-reporting regime provision is not applicable, the parties must enter into arbi- could be implemented, with full details provided in the con- tration proceedings in accordance with national or interna- tract documentation. tional rules. This is time consuming, expensive, damaging to There are a number of recognised systems for measuring the contractual relationship and may jeopardize the delivery contract performance through the use of key performance waste services.  Amager Bakke, heat and power waste-to-energy plant in Amager, Copenhagen, Denmark. Photo: © Boggy | Dreamstime.com 127 There is no best PSP option. The selection of an optimal ❚ A positive partnering attitude between all involved PSP model depends on having a thorough understanding players of the local situation and on a careful analysis of all the financial, technical, social and environmental factors that The contractual relationship between the public and pri- are relevant to it. vate sectors must be clearly defined and systematically applied. Successful, cost-effective PSPs depend on fair No matter which PSP model is chosen, its success is likely competition, full transparency of information and assidu- to be strongly influenced by a common set of factors: ous contract monitoring. ❚ A sustained commitment to the project at the highest Beginning with PSP projects with relatively low invest- levels ment requirements – such as a waste collection, transfer and haulage contract – can help strengthen the capacity ❚ Clear, realistic goals and expectations of the contracting authorities and encourage the develop- ❚ All parties affected by the project to be involved and ment of a national market. The possibility of implementing kept informed facilities and services via outsourcing (or possibly DBO) contracts might be the most promising approach initially. ❚ All risks to be identified, assessed and assigned to the most appropriate parties Comprehensive PSP projects that involve large invest- ment outlays by the private sector depend upon a fully ❚ Sufficient commercial potential to attract an external elaborated implementation framework, a clear financing service provider concept, and contracting authorities with the capacity to manage the contract preparation process and to monitor ❚ A transparent bidding and awarding process project implementation and operation. Large projects can ❚ Regulatory and administrative capacity to manage and expose an inexperienced contacting authority unknow- monitor PSP contracts ingly to high legal, financial and service supply risks. Workers in Rizal, Philippines, sort through plastic waste and segregate them for proper recycling. Photo: © junpinzon / Shutterstock.com 129 6Public participation and stakeholder engagement 130 6 Public participation and stakeholder engagement 6.1 The need for public participation 6.2 Public communication and and stakeholder support engagement in waste management The success of waste management depends on the partic- ipation of stakeholders and the presence of a ‘social con- 6.2.1 The importance of communication in tract’ with citizens and the population-at-large. Waste waste management management systems are much more successful in con- Waste management is a public service that is especially texts in which core stakeholders engage in and support dependent on public participation for success. To be suc- waste policies and services. Where the public accepts and cessful, waste management initiatives require buy-in from participates in waste management by abiding to guide- waste generators, especially when it comes to proper lines in handling waste and by paying for services, waste waste placement, source separation, waste minimization, management operations can excel. In contrast, when users and siting of infrastructure. Public engagement requires or operators are disengaged or even opposed to the waste not only adequate knowledge of processes and environ- management system, performance suffers. mental impacts, but also a positive perception of the Waste management involves a diverse range of stakehold- waste management system as a whole. ers157. Some are planners, some are users, and others are On-going and well-resourced communications and aware- operators. Each participant engages with the waste man- ness-raising activities are sometimes overlooked but are agement system in a unique way and experiences different essential to successful waste management systems. The impacts from the design of the waste management system. goal of public communications in waste management is While some stakeholders simply seek dependable waste not only to inform users of systems and processes, but also collection services in their neighbourhood, others may to empower people, obtain feedback, and foster a sense of depend on the waste management sector for their liveli- belonging amongst residents that shapes their attitudes hoods and employment. For some, the waste management and willingness to take ownership of waste management system can be a source of convenience and empowerment, outcomes. Communication programs can also give voice for others, the waste management sector may become a to the needs of different populations, including vulnerable source of marginalization. and marginalized groups. Local authorities must take different stakeholders into Even in the most basic waste management contexts, munic- account in designing an effective waste management sys- ipalities must communicate with citizens to build healthy tem. Their perspectives can not only help foster positive and safe communities. It is important for residents to under- behaviours that allow the system to function smoothly, stand the linkages between how waste is treated and the but also help local governments build a more equal and impacts on water pollution, air quality, flooding, and health just public service that is sustainable in the long-term. outcomes. Public communications can motivate the public By ensuring that the waste management system serves to dispose of waste in bins rather than dumping waste into all stakeholders, local governments may nurture a wide- rivers or openly burning garbage in neighbourhoods. spread sense of ‘ownership’ of the waste management system that leads to positive social, environmental, and As cities mature in waste management practices, they economic outcomes. may aspire to more ambitious goals on public cleanliness, waste minimization, and recycling. Governments often This chapter builds on the basic principles and approaches begin to adopt mandatory source-separation programs for of citizen engagement and focuses on three aspects of par- recyclables or food waste. Communication is vital at this ticular importance for the waste sector: effective public stage to achieve acceptance and behaviour change, such outreach and communications, integration of the informal as to put food waste in a separate bin or to bring recycla- sector with the rest of the sector chain, and gender-inclusiv- bles to a central drop-off point. Since costs may increase ity in waste management practices. Each section provides as waste management systems grow, governments must context on the importance of each of these three pillars and communicate with residents to build trust and motivate explores constructive actions for local governments. them to pay for services. Waste management stakeholders include waste generators, including residents, institutions, commerce and industry; private waste management service 157 providers; PROs; non-governmental organisations; professional associations; community groups; informal waste collectors; administrative units in local, regional and central government; state-owned enterprises as service providers; international agencies as partners and financiers; commercial banks; utility providers involved with waste fee billing and collection, such as water and electricity companies. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 131 Communication is also critical for waste management earliest stages and be supported with an appropriate infrastructure initiatives. New facilities, such as a landfill budget. Strong communication will not only increase the or a recycling center, are often resisted by residents liv- chances of success of waste management programs, but ing close to the proposed site for fear of smells or noise. also strengthen the relationship between the public sec- Especially as cities urbanize and land becomes scarcer, tor and citizens and build widespread ownership for the cities will need to communicate and collaborate with resi- waste management outcomes. dents to design solutions that are acceptable to the public. Cities also need a consistent communications program as 6.2.2 Public engagement and financial part of basic service provision. Waste officials must com- outcomes municate with the public regarding disposal guidelines, to While public engagement is important for social and envi- announce service changes, and to understand ad-hoc prob- ronmental considerations, it can also lead to a signifi- lems with dumpsters or collection routes. Ongoing service cant positive return on investment for public agencies. monitoring requires inbound communication channels for Importantly, public engagement can increase revenues citizen complaints and questions, which must often be or reduce costs such as by improving recovery of sellable managed by a permanent and responsive helpdesk. materials, reducing clean-up costs, and increasing user Regardless of the stage of waste management, communi- fee payments (see Table 9). Therefore, effective communi- cations should be integrated into public planning at the cations are directly linked to financial outcomes. Table 9 Financial impact of waste management campaigns A Campaign that…. Results in financial impact through… Encourages people to recycle more and ❚ Increased volume of material capture leading to higher income from the sale of those recycle correctly materials ❚ Increased material quality and purity that increases the value of materials recovered Savings from avoided disposal costs, where final disposal is costly Motivates people not to dump waste ❚ Reduced municipal operating costs illegally or drop litter ❚ Reduced healthcare costs through fewer dumpsites and healthier living conditions ❚ Beautification leading to increased tourism and inward investment ❚ Preserves real estate and land market values Wins buy-in for new waste treatment ❚ Fluid and timely delivery of infrastructure, unhindered by protests and public resistance facilities and infrastructure Reduces the amount of waste that ❚ Reduced waste management operations and disposal costs people generate ❚ Reduced utilization of land for waste Builds trust between the public and the ❚ Higher and more consistent user fee payments private sector ❚ Enhanced public participation in planning efforts Encourages citizen feedback ❚ Early resolution of overflowing containers, litter, and improper dumpsites ❚ Efficient and acceptable service designs that encourage participation and payment Given that waste management services are often fund- should be aligned with the magnitude of change outlined ing-strapped, government officials may hesitate or be in a city’s strategy and plans. constrained in allocating funding to communications Governments should develop realistic expectations around activities when investments in infrastructure and services costs in order to develop the right budgets. Communication are much more tangible. However, adequate funding is costs may be highest when launching new services or pro- central to successful public communications campaigns grams. Costs per unit may also be higher at the smaller and should be seen as an investment as much as an expen- scale than at larger scales due to the fixed costs required diture. Public agencies should include communications to develop or deliver content. For example, local authori- as an ongoing line item in public budgets, and funding ties in the United Kingdom set a communication budget 132 6 Public participation and stakeholder engagement of US$1-2 per household for ongoing communications158. implemented. Informing citizens of new initiatives pro- Expenditures per household made by local authorities in vides them with time to learn about proposed changes and Ireland were estimated to Euro 5-7 compared to Euro 7 in processes, express opinions, and accept new processes Denmark and around Euro 2.5 in Italy159. Costs will vary also before they are implemented. A recent study in the United according to local prices for printing, media, and labour. Kingdom found that many citizens felt that infrastructure projects happen ‘to’ them rather than ‘for’ them while at If facing limited budget capacity, local authorities should the same time expressed interest in being involved in the determine what communication activities are essential and planning and delivery of services160. By promoting trans- which are lower in priority. Further, local governments may parency, leaders have the opportunity to earn more trust consider reducing the frequency of their campaign from, and authorization. for example, 5 times a week to 3 times a week. Smaller local governments can also consider partnering with other Public leaders could also benefit from measuring public local governments to share costs and achieve economies of sentiment to assess the readiness for different environ- scale. External partnerships, such as with NGOS and indus- mental initiatives. For example, in Ukraine, pilot projects try organizations, can also reduce costs, as can the choice of and surveys on source separation revealed that the major- media used to deliver communication content. ity of the population had a positive attitude toward waste separation, were motivated by environmental outcomes, 6.2.3 Local capacity for public engagement and did not require strong financial incentives – signalling a readiness to move toward source separation programs161. Since waste management is typically a local public ser- vice, citizen engagement begins at the leadership level. More generally, feedback is important to the maintenance However, within local waste management authorities, of waste management systems. In addition to acquiring roles and responsibilities tend to be operational in nature public feedback for major projects, municipalities should and focus on service delivery; there is often only minimal seek resident feedback regularly. Through questionnaires, emphasis on communication processes. online feedback portals, and dedicated phone hotlines, governments can stay attuned to the opinions of residents, In order to deliver on their role of providing cost efficient identify problems with waste infrastructure or services, public services to residents, it is important for government and channel complaints to offices and operators who can leaders to be familiar with the importance of citizen engage- address issues in a timely manner. Combined with regu- ment and the strategic and tactical aspects of engagement lar surveys and standard service monitoring activities, initiatives – in addition to technical knowledge. Without inbound citizen communications provide critical nuance strong capacity for communication at the leadership level, for future city planning efforts. Citizen feedback also allows policies and plans may not be supported by the right levels local authorities to address issues surrounding, dumping, of public engagement, campaigns may be short-term rather littering, or service shortfalls at a small, affordable scale than long-term focused, funding may be insufficient, com- before they escalate to a large, costly scale. For example, munications may not be initiated until problems already to accommodate citizen input, the City of Johannesburg in exist, and content may be poorly produced. As a result, san- South Africa provides region-by-region phone numbers to itation and economic outcomes may be suboptimal. report illegal dumping162. Local officials should especially recognize that public com- One way that local authorities can build internal capac- munications are not only an outbound process as com- ity through public engagement is by designating a core monly imagined, but also an inbound process. Leaders are group of employees responsible for public engagement. more empowered to deliver successful waste management This group would undertake outbound communications projects when they communicate with the public early campaigns and also serve as a permanent and active unit and regularly. Early feedback, and even informed debate, that manages citizen complaints and questions. This unit gives local authorities a chance to anticipate barriers and can ensure that communications are consistent across dif- modify systems before they are designed, contracted, and ferent arms of the government and amongst operators and 158 Morton and Cross, Zero Waste Scotland Communications Guidance. Waste Resources and Action Program, 2012 159 Costs for Municipal Waste Management in the EU Final Report to Directorate General Environment, Eunomia, Ecotec Research and Consulting, European Commission, 2001 160 Independent Survey of Attitudes to Infrastructure in Great Britain, Copper Consultancy, 2015 161 Stavchuk, I., Communication in Waste Management - Promotion of Waste Separation in Households. IIIEE, Lund University, 2005 162 City of Johannesburg, City Services: Illegal Dumping, 2021 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 133 that communication is conducted strategically rather than shortfalls, the public agency can define its goals for com- in an ad hoc manner. This organization can also coordi- munications. The government may set hard goals, such as nate with external stakeholders and partners in the deliv- increasing participation rates and knowledge of new pol- ery of engagement campaigns. With their experience, icies and procedures, as well as soft goals, such as public these leaders would serve as repositories of institutional perception and acceptance. All goals should be in align- knowledge about the local communications context. This ment with the municipality’s solid waste master plan. would be especially valuable in the process of involving There should be clear definitions of success and timelines representatives of marginalized and vulnerable groups for achievement. to ensure that waste services are fair and meet the needs Audience. Communities vary greatly in their demograph- of all citizens, and in integrating the views of both cham- ics, needs, and relationship with waste management ser- pions and challengers of proposed programs. With their vices. Thus, communication methods and content will vary insight on customers, this group can also significantly ben- by audience. The public agency should identify different efit the planning and budgeting cycles of the waste man- audience groups for communication based on their goals. agement authority. Audiences may include aggregate user groups such as neighbourhoods, schools, condominiums, places of wor- 6.2.4 Waste communication plans ship, restaurants and hotels163. Audiences may also be Communications should not be ad-hoc. Communications divided by personal characteristics such as age, lifestyle, must be properly planned and carefully aligned with the culture, knowledge-level, digital literacy, and access to policies they seek to support. A well-designed waste com- services. munication plan can help a city effectively design, coor- Messaging and Design. With audience groups in mind, the dinate and allocate funding. Just as waste management communication planners can begin to consider messag- master plans allow local governments to take a compre- ing. Leaders should consider what messages the audience hensive and long-term view of service provision and should retain based on the strategic goals. For instance, engage the right stakeholders, communications plans help to educate residents on a new process, it may be effec- governments reach end goals by investing in the right tive to use simple and visual flow charts that are easy to places, avoiding overlapping efforts, and achieving prog- read and understand. To announce a new regulation, pub- ress in productive steps. lic agencies may consider a single sentence summary of Communication plans can vary by context, but should the modification. Schedules, cost schemes, and recycling address the following factors: rules should be supported by easily searchable databases or information tables. The communication campaign may Diagnostics. A communication plan for waste management also be focused on motivation and behaviour change. For should begin by understanding the status quo. The munic- these initiatives, simple and catchy phrases are often most ipality should assess the context and define the need for effective. For an example from Lagos, Nigeria see Box 17. public engagement. It requires reliable information to do so. The government may consult reputable partner orga- Motivational campaigns may also focus on sharing rea- nizations or directly conduct surveys and interviews. The sons for engagement, such as keeping the city clean or agency may gauge public opinion on municipal services, reviving the tourism industry. Citizens are often unin- assess recycling rates and shortfalls, and evaluate common formed about the waste value chain, such as what hap- behaviours. The government should also understand the pens to waste and recyclables once they are collected164. levels of public knowledge on the waste system and envi- In these cases, simple education on facts may naturally ronmental implications. Direct consultations with interest lead to more motivation. groups may provide more nuance on interest, awareness, In this phase of content design, the municipality may con- pain points in the waste management system, and discon- sider conducting additional public consultations to brain- nections in messaging across different agencies. storm and test messages. It may also be useful to engage Strategic Goals. With an understanding of strengths and partner organizations and design specialists. Loureiro, Ana, et al. Environmental Communication Strategy. International Solid Waste Association and Climate and Clean Air Coalition, 2015 163 ‘The Role of Public Communication in Decision Making for Waste Management Infrastructure.’ Journal of Environmental Management, 2017 164 134 6 Public participation and stakeholder engagement Box 17 Lagos Waste Management Authority recycling campaign At the turn of the new year in 2021, the Lagos Waste Management Authority in Nigeria launched a recycling campaign to encour- age residents to properly dispose of waste. The campaign utilizes catchy slogans such as ‘Turn your Cash into Trash’ and ‘There’s a Goldmine in your Dustbin’ to motivate city residents and reinforce financial incentives for recycling165. Posters Used in City of Lagos Recycling Campaign Timeline and Delivery. The delivery of an engagement strat- The timing of waste management initiatives can affect egy involves several tactical components. The planning their success, and governments should set a timeline and agency must first ensure that the right partnerships and anticipate contingencies. For new waste initiatives, public responsibilities are defined. While public agencies may engagement should be slated to begin in the design stage. deliver the communications campaign themselves, they may Citizen feedback should be used to influence the design of also seek to partner with community organizations, NGOs, the program, reveal potential roadblocks, and ensure that and industry members to deliver messages. Some stake- influential stakeholders are informed and involved, pre- holders may require training on communication tactics.165 venting pushback at later stages. For example, introducing 165 Turn Your Trash into Cash, Lagos Waste Management Authority, 2021 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 135 waste pickup in a hitherto unserved neighbourhood may If a campaign is promoting the launch of benefit from the insight and support of existing communi- ty-based organizations that collect waste informally. a new recycling service, the messages should appear just before that service When it comes to behaviour change, many studies have starts. Too soon, and citizens might shown that individuals are more receptive to modifications in habits at key points of transition in their life166. Therefore, be disengaged at launch. Too late, and local governments may plan to connect with citizens during citizens will have new containers that key milestones in their lives, such as New Year’s Day, moves they do not utilize properly. to a new home and first days of employment. Similarly, while urban littering can be reduced through a strong anti-litter- metrics may include public satisfaction levels, awareness ing campaign, the same messages must be revived for major levels, recycling rates, and volume of engagement with gatherings and holidays when waste generation is expected public services. These metrics may also be supported by to rise. If a campaign is promoting the launch of a new recy- measurements of impression such as number of exposures cling service, the messages should appear just before that or number of phone calls in order to assess efficiency. service starts. Too soon, and citizens might be disengaged at launch. Too late, and citizens will have new containers If the impact of the campaign is poor, planners will want that they do not utilize properly. to consider the reasons for this. For example, the Covid- 19 pandemic in 2020 caused many people to change their Ultimately, public communication is an ongoing exercise daily habits. Significant problems may have occurred, rather than a one-time initiative. Regular communication is required to motivate continued practices that achieve such as broken bins, substandard collections or seasonal public sector goals. For example, while the implemen- effects such as poor weather. Metrics can be used to report tation of a new door-to-door recycling scheme requires on a campaign’s performance once it has been completed. intense, targeted communications when the program is The effect of a campaign in terms of its reach as well as introduced, the encouragement to properly separate recy- of its impact on operations and strategic goals is useful clables from mixed waste must be reinforced from time to in designing future campaigns and in justifying further time to prevent declines in participation. investment in communications. The campaign may be most effective if implemented in 6.2.5 Partners in citizen engagement and phases, with the messaging or audience modified or scaled up in each phase. Governments may consider introducing communications a pilot scheme first and collect data on its efficacy before Despite their responsibility for local service provision, finalising the communications strategy. it is not necessary that local authorities and waste man- When planning the implementation of the campaign, pub- agement companies should implement communications lic agencies should coordinate with operational stake- campaigns directly or alone. Well-connected and internally- holders to ensure that the programs the communications resourced external stakeholders with strong credibility in messages are meant to support are in place at the right the local community – such as community organizations, time. For example, trash bins should be installed and emp- NGOs, and corporations – are often well placed to assist tied regularly if an anti-littering campaign is to take place. in this area. Local authorities may also delegate this func- To ensure a smooth delivery, implementation agencies tion to PROs and cities may partner with local and inter- should also consider lead times for procuring media con- national organizations to communicate efficiently and tent as well as to gain approvals. Finally, funding must be cost-effectively. committed in advance in the public budget and uncertain- For example, the City of Sao Paulo, Brazil, partnered with ties in funding must be managed. the International Solid Waste Management Association Monitoring and Evaluation. In order to measure success and the Climate and Clean Air Coalition to develop an and improve future initiatives, the public agency should Environmental Communication Strategy for Municipal set targets related to communications and behaviour Solid Waste Management167. In Austria, a national change and monitor these metrics over time. Impact Producer Responsibility Organization responsible for Thøgersen, J., The Importance of Timing for Breaking Commuters’ Car Driving Habits, Collegium, 2012 166 Loureiro, A., et al. Environmental Communication Strategy, International Solid Waste Association and Climate and Clean Air Coalition, 2015 167 136 6 Public participation and stakeholder engagement collecting packaging waste, EKO-KOM, funds communi- educating citizens and promoting behavioural change169. cations and education campaigns that have helped the Universities also provide opportunities for building curric- country increase its recycling rate168. In Portugal, an inde- ulums in environmental education that train future profes- pendent citizen volunteer-led organization called Re-Food sionals working in sectors that relate to sustainability and has connected with over 900 institutional food waste gen- municipal services. erators, such as hotels and restaurants, to divert their food Cities with active informal sectors or community-based waste through donations at no cost to the government. organizations may also consider connecting with these Governments may also consider partnering with employ- local cooperatives to implement waste campaigns, given ers, celebrities, and reputable research organizations to the strong connection that exists between communi- deliver and scale-up communications campaigns. ty-based collectors and households and their capacity to Schools and universities are another vital partner. As assess the quality of separated waste (see Box 18 with an institutions for learning and for youth, engagement cam- example from Indonesia). paigns within schools can have a strong impact on long Public agencies may also look to engage with the public term community behaviours and outcomes. Young peo- through influential local institutions, of which the local ple often serve as conduits of information to their fami- media can be a specifically important partner. Local gov- lies, which can amplify the impact of education efforts. For ernment can issue press releases on important system example, following the passage of a Zero Waste Law, the changes and allow media portals to disseminate news in city of Buenos Aires, Argentina, designed waste education outlets and languages that connect with their readership, programs in schools and universities as a core method for typically at no cost to government. 168 OECD Environmental Performance Reviews: Czech Republic 2018. OECD iLibrary, 2018 169 Alvarez, M., Filling the Gaps in Buenos Aires’ Waste Reduction, University of Pittsburg, 2019 Box 18 Bali’s Rumah Kompos Padangtegal (RKP)170 Rumah Kompos Padangtegal (RKP) is a community-led waste heard by the community, many households complied with the collection program working to build a robust waste collec- system. The households that continued to sort waste poorly tion system in a high plastic-leakage context in Indonesia. were sent a text message using language such as ‘You’re one RKP waste management workers hail from Indonesia’s low- of only five families which does not separate its waste. We est class caste. Normally marginalized, these workers have can’t get to 100 percent separation because of you. Please gained dignity and respect through their work engaging com- separate your waste.’ RKP members also confronted house- munity members in proper source separation and in minimiz- holds in-person and reported noncompliant households to the ing pollution in the town of Ubud, Bali – earning them the local religious authority, which holds significant power in the title of ‘Clean Warriors.’ community. RKP has been central to achieving a 100 percent source sep- This system led to a source separation compliance rate of aration rate in Ubud using a combination of systems design, two-thirds. To influence the behaviour of the final third, public pressure, and religious inspiration. Initially, RKP sup- RKP appealed to the religious authority, gaining permission to only collect properly sorted household waste, leaving all plied every household with three bins -- one for organic waste, mixed waste behind. Despite initial public outrage, the sup- one for non-organic waste, and one for compost. During waste port of the religious leader and the modification of service pick-up, the RKP collectors would shout the household name, rules led to a 100 percent source separation rate. followed by either ‘good’, ‘bad’, or ‘terrible’, depending on how well the waste was separated by the household. Another RKP demonstrated that the power of a community-based collector recorded the results in written form. Since resi- waste collection organisation can be a powerful force in com- dents could hear the classification given to their neighbours municating with and influencing residents’ behaviour through and reciprocally knew that their own performance would be their deep understanding of community values. Danielson, J., et al., Elevating Waste Management to Spiritual Levels in Bali, Alliance to End Plastic Waste, 2020 170 137 Importantly, communications should be a collaborative Trash People by German artist HA Schult, Tel-Aviv, Israel. © Maratr | Dreamstime.com endeavour between different levels of the government and other organizations responsible for waste management out- comes. Though different stakeholders have different objec- tives in waste management, they all benefit from improved citizen engagement with public services. For example, national governments can more easily meet national targets and be more internationally competitive when sanitation standards improve. PROs, charged with capturing waste material from industry activities, increase revenue when citizens bring back materials for recycling. Public agencies at varying levels of government will have different forms of influence on communications. For example, national governments can set broad targets to align regional and local governments, while local governments are equipped to influence local dynamics that trigger behaviour change (see Table 10). Cooperation between stakeholders at dif- ferent levels of government can lead to powerful outcomes, as was the case in the United Kingdom through the Waste Resources Action Programme (see Box 19). Table 10 Opportunities for public engagement at multiple entity levels171 Entity Objective Contribution to Public Engagement National government ❚ Meet national targets ❚ Set strategic targets and local mandates ❚ Meet international commitments ❚ Raise awareness at a national level ❚ Fulfil obligations set by donor organisations ❚ Provide broad-stroke messaging ❚ Promote economic and social prosperity ❚ Create and aggregate resources for local governments ❚ Facilitate knowledge sharing across local agencies ❚ Develop partnerships with NGOs, media, and public- interest groups that support local initiatives Local authorities ❚ Meet local waste management commitments ❚ Design locally-effective strategies and tactics ❚ Maximize cost-efficiency of waste services ❚ Conduct high-touch educational sessions in ❚ Build public acceptance for new infrastructure communities facilities ❚ Request and process public feedback ❚ Increase citizen satisfaction ❚ Partner with local implementation organizations ❚ Improve local environmental conditions ❚ Customize messaging to culturally and economically ❚ Boost the economy and local employment diverse audiences ❚ Monitor local performance and fine-tune initiatives Producer ❚ Maximize material capture and minimize ❚ Communicate directly with businesses and industry Responsibility contamination ❚ Encourage consumer participation in take-back Organisations ❚ Earn a profit programs ❚ Fulfil nationally mandated activities ❚ Provide expertise on specific products ❚ Fund communication campaigns using earnings ❚ Tie messaging to operational programs Adapted from: Improving Recycling through Effective Communications, Waste Resources Action Programme (WRAP), 2009 171 138 6 Public participation and stakeholder engagement Box 19 Waste Resources Action Programme in the United Kingdom172 In the late 1990s, the United Kingdom government adopted color palette, typographical styles and common messages. the European Union Landfill Directive which set a number The brand included a set of icons denoting individual waste of improved waste management practices into motion. Over streams that could be recycled. WRAP led numerous cam- the following 10 years, recycling capacity was significantly paigns on TV, in movie theatres, national newspapers, and increased and over 600 local authorities introduced door- magazines. At the local level, WRAP created a central repos- to-door recycling services. To support this transition, the itory that provides free research and graphic templates that government funded the creation of a non-governmental orga- are downloadable and adaptable. The centralized content nization, the Waste Resources Action Programme (WRAP). provides a consistent and recognizable approach to waste The mission of WRAP was to stimulate demand for recyclable management communications across the United Kingdom. materials by coordinating with businesses, individuals, and The campaign is active on social media and offers a search- communities. able database that households can use to determine the right process to recycle common goods. To achieve its mission, WRAP led several communications campaigns including a national Recycling Campaign called The campaign has served as the national recycling campaign ‘Recycle Now’173. The campaign empowered communica- for England and has been adopted by over 90 percent of local tions at both the national and local levels. At the national authorities. level, WRAP built a recycling brand identity including a logo, WRAP - Circular Economy & Resource Efficiency Experts. The Waste and Resources Action Programme, WRAP, 2021 172 RecycleNow, Recycle Now | Where and How to Recycle, The Waste and Resources Action Programme, WRAP, 2021 173 Examples of communication materials produced for local services consistent with the national design. The national brand identity for recycling applied to all communications regardless of location. WRAP provides a searchable database for Standardised material icons applied in all communication recyclable contexts relating to the separation of materials (for example goods. at recycling centres). Examples of how regional authorities adapt the national identity for application to local communications. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 139 Box 19 Cont. The United Kingdom’s approach with WRAP was effective The fact that WRAP operated under the auspices of a gov- in several ways: ernment mandate was a vital factor in the success of the Recycle Now program. With government-endorsed owner- ❚ Both national and local campaigns were visually inte- ship of communications responsibility, local governments grated, improving recognition and awareness avoided an ebb and flow of initiatives across different enti- ❚ Local campaigns were consistent with the national commu- ties and the disjointed campaigns that can result from strate- nication strategy and those of their peers gic misalignment. ❚ Local communications grew from the heightened aware- ness achieved by the national campaign ❚ Local authorities avoided the need to invest large budgets to develop campaigns from the ground up 6.2.6 Communications and engagement tools Communication tools also differ in terms of the scale of the audiences they reach and the types of messages they are The choice of media is critical to any communications effective in sending. For example, TV and radio advertising endeavour. For the waste management sector in particu- is effective in sending all members of a region the same lar, communications campaigns tend to require a broad message174. On the other hand, door-to-door canvassing reach, speedy implementation and low cost. It is import- and mobile phone text messaging may be more suitable ant to explore different media options in the local context for delivering customized information to households and to maximize on impact while minimizing on expenses. individuals. Local authorities have several tools available for com- Communications tools also differ in their cost structures. munications, each with different costs and benefits. Non- Non-digital forms of advertising, such as fliers, mail and digital options include door-to-door advertising, mail, newspaper, incur design and printing costs and require local newspapers, informational leaflets and calendars, lead time for design and production. On the other hand, posters, and large signage. Local governments can directly communications using websites, social media and auto- communicate with community members at city hall meet- matic text messaging may incur little to no costs. Similarly, ings and local events, such as a recycling information day communicating with newspapers and other press agencies in a park. can be a rapid and affordable way to deliver messages to a Digital communications tools are now much more com- large audience network. monly used for public communications. At a basic level, As cities consider media, it is crucial to take accessibility TV, radio, and mobile phones are simple and commonly into account. As cities contain diverse communities of dif- used platforms that can be used to reach a wide audience. ferent identities, abilities, and cultures, it is important to For more digitally literate audiences, email, social media ensure that communications are made accessible to dif- and webpages are effective for two-way communications ferent audiences. For example, webpages should be trans- with residents. lated into all major local languages, as should print media Different forms of media are appropriate for different audi- and brochures. Further, utilizing alt-text on images or pro- ences. For example, brochures and radio campaigns may viding subtitles in videos can enhance access to the blind be effective in reaching an older audience while failing to and the deaf. Communications campaigns should also be reach a younger one. Posters, signs, and billboards placed sensitive to different literacy rates and utilize audio meth- in prominent public spaces – such as markets, parks, and ods to reach communities that may struggle to interpret community centers – may be useful for reaching the gen- information in print. Waste management is ultimately a eral public and for sharing generic messages. service that affects all citizens, and that depends on the Morton, Gareth, and Lucy Cross, Improving Recycling through Effective Communications, Waste Resources and Action Program, 2013 174 140 6 Public participation and stakeholder engagement participation of all citizens to maximize its effectiveness Artist Eduardo Kobra staff painting a mural about recycling in São Paulo Brazil. Photo: © Marphotography | Dreamstime.com – communications should therefore be accessible to all. For example, the city of São Paulo, Brazil, recently launched a public cleanliness campaign. The campaign utilized a playful slogan, ‘Eu jogo limpo com São Paulo,’ that connected playfulness and fun with a clean city175. The city partnered with municipal cleaning companies and designers to use a range of media to reach the public, including TV, radio, internet ads, newspapers, and indoor and outdoor posters (see Figure 6). The city of Kitakyushu, Japan, on the other hand, offers in-person workshops in neighbourhoods to educate residents on food waste com- posting processes176. Figure 6 Media mix for City of São Paulo Clean City Campaign177 2,23% 3,34% 7,0% 4,09% 5,48% 14,04% 63,79% are being used for requesting services, providing infor- mation to residents and offering reminders on waste collection times and changes. For more digitized com- n Campaigns n TV n Radio n Internet ads n Newspaper munities, mobile apps provide a variety of functional- n Indoor posters n Outdoor posters ity from searchable databases to videos and information pages. For less technologically advanced communities, As digitization has grown across the world, digital media SMS text messages offer basic connectivity. Monitoria has become an especially useful option for public com- Participative Maputo (MOPA) is a digital platform imple- munications. A major advantage of digital media is its mented in Maputo, Mozambique, that connects citizens low-cost relative to print and advertising methods of com- with solid waste management services operating as the munication. A basic mechanism is for governments to con- primary communication portal between residents and the nect with the public through a website. The local agency local authority178 (see Box 20). Similarly, residents of the Kaduwela municipality of Sri Lanka have access to the app may set up an official web page that provides informa- ‘Clean Up’179. Using this App, residents can track the live tion on its services, instructions on recycling, and contact movements of local garbage trucks, receive notifications information for government helplines. The website may for service interruptions, and input their location to look offer users the ability to provide direct feedback. up the days on which different types of garbage are col- Some municipalities have turned to mobile phones as a lected (e.g. plastics, paper, food). Users can also rate the method of communicating with residents. Mobile phones service provided and give feedback (see Figure 7). 175 Nova/sb. Eu Jogo Limpo com São Paulo, 2014 176 Communications from World Bank Study Tour in Kitakyushu, Japan, 2017 177 Nova/sb. Eu Jogo Limpo Com São Paulo, 2014 178 MOPA - Participative Monitoring Maputo.’ Mopa.Co.Mz, MOPA, 2021 179 Trancite24. ‘Clean Up - KMC - Apps on Google Play.’ Google Play, 2021 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 141 Box 20 MOPA in Mozambique In Maputo, Mozambique, 54 percent of the population of Since MOPA targets users in lower income areas, the app has 1.1 million live below the poverty line and 70 percent live connected marginalized voices directly to the municipality in informal settlements180. Public services, already limited and allowed public services to better serve their needs. by funding and capacity, are particularly poor in low income neighbourhoods. As a result, trash often went uncollected in containers, wild dumpsites and ditches and sometimes con- tainers were set on fire. Problems often remained undetected by the municipality and citizens had to write long letters to reach the responsible official in the city government. Through a World Bank-supported project, the Municipality of Maputo developed Monitoria Participative Maputo (MOPA), a digital platform that connected citizens with municipal waste management services181. Citizens use the platform to report sanitation problems to city officials using either SMS or USSD messaging, a mobile app, or by dialling *311#182. The plat- form allows users to track progress with resolving the prob- lems and to receive updates on when the issue is resolved. The platform handles 20 reports per day on average, has led to the removal of over 300 dumpsites across the city and has received over 9,600 submissions to date. Services are avail- able in both Portuguese and English. 180 Making All Voices Count. MOPA: How an App Generates Data That Help Clean-up Maputo, 2017 181 Improving Service Delivery in Maputo’s Poor Neighborhoods, World Bank, 2018 182 MOPA - Participative Monitoring Maputo.’ Mopa.Co.Mz, MOPA, 2021 Figure 7 Example screens in clean up app for Kaduwela Municipality183 Ibid 183 142 6 Public participation and stakeholder engagement Figure 8 Social media post during Christmas holidays in Singapore186 nea_sg • Follow nea_sg When disposing of your trash, pick out and rinse the recyclables before dropping them off in the blue bins! Even better, set up your own recycling corner and encourage your family members to #RecycleRight all year round! Learn more: https.www.facebook. com/notes/national-environment- agency-nea/what-can-we- recycle/1932908716930466 DECEMBER 23, 2020 Add a comment… Post Social media is an increasingly powerful mechanism for whom they serve, foster public ownership in the service connecting with local communities. Social media can serve system and ensure that the waste management system as a large platform for sharing initiatives, especially with benefits all stakeholders. an audience that has opted in as members. Social media There are several methods that local authorities can use also serves as a powerful way for waste and recycling to involve residents in the planning and delivery of waste agencies to help people understand messages and ser- management services. For example, participatory budget- vices through storytelling, especially by using images and ing is a form of public engagement that involves citizens in short phrases184. For example, the National Environment decisions around the use of public funds. This method was Agency of Singapore maintains an official Instagram famously used by the government of Porto Alegre, Brazil, account that is used to share photo-based posts on envi- to shape the usage of the city budget, which was allocated ronmental issues, including proper disposal, recycling, to vastly improve urban waste collection187. Participatory and waste reduction185. The platform directly reaches an budgeting may go hand in hand with participatory plan- audience of over 16,000 (see Figure 8). ning, which convenes a broad base of stakeholders to diagnose and develop solutions to jointly identified prob- 6.2.7 Other citizen engagement mechanisms lems. Another simple participatory method of planning is focus group discussion, which involves a small group In addition to traditional communications campaigns, of citizens to discuss specific goals, procedures, and time local governments may consider a variety of specific meth- frames in order to gauge users’ perspectives, values, and ods to engage with the public on an ongoing basis. These concerns. Further, local authorities can practice commu- engagement activities differ substantively by type and nity contracting and directly contract local organizations, mechanism and range from consultations to participa- such as community-based organizations or informal waste tory methods of decision-making. While these ‘high-touch’ collectives, to provide waste services. strategies may require a high level of preparation and pro- gram design by public authorities, they can help govern- Local authorities can formalize feedback mechanisms ments maintain accountability and trust with the people from citizens. For example, a citizen report card is an 184 Cole, K., Communications: Social Media and the Waste Management Sector: Eight Strategies to Use Social Media More Effectively, Waste Advantage Magazine, 2016 185 National Environment Agency of Singapore, Official Instagram Account, 2020 186 Ibid 187 Bortoleto, Ana Paula, and Keisuke Hanaki, Report: Citizen Participation as a Part of Integrated Solid Waste Management: Porto Alegre Case, 2017; Calisto Friant, Martin, Deliberating for Sustainability: Lessons from the Porto Alegre Experiment with Participatory Budgeting, International Journal of Urban Sustainable Development, 2019 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 143 assessment of public services by the users through client 6.3 The informal sector feedback surveys, often aimed at building public account- ability through media coverage and civil society advocacy. The informal sector plays a key role in delivering waste For example, in Morocco, a citizen report card was used to management services and achieving resource sustainabil- evaluate the quality of waste management services pro- ity in low- and medium-income countries. The informal vided by private collection companies188. Results influ- sector consists of workers that are not formally charged enced the renewal of private contracts. Governments may with waste management activities189. They are typically also implement citizen satisfaction surveys periodically to unregistered, work in unregulated spaces and do not pay acquire a quantitative assessment of government perfor- taxes. Informal waste workers are often known as ‘waste mance and service delivery, such as regarding the accessi- pickers’ who sort recyclables from mixed waste in streets bility of waste containers, cleanliness of streets, clarity of or on dumpsites190. These workers may also be itinerant, instructions, and general satisfaction with waste services. traveling door-to-door to collect waste from households, often using pushcarts, donkeys, and motorized vehicles. Citizen surveys can be taken at the individual or at the They may additionally provide services such as street community group level. Public authorities can also con- cleaning and sweeping. Downstream in the value chain, duct public hearings, which are formal community-level the informal sector includes aggregators of recyclables meetings where local officials and citizens have the oppor- who sell to the recycling industry. Informal sector workers tunity to exchange information and opinions, to discuss mainly profit from revenues from selling recyclables col- waste management services. lected, though they sometimes earn income from house- Finally, local authorities can build public accountabil- holds for waste removal services191. ity structures into waste management systems. One struc- The informal sector employs a significant number of workers ture of building community oversight into a project is by around the world. It is estimated that around 15 million openly sharing information on waste projects and allow- people work in informal waste management worldwide, with ing community members to conduct investigative work and estimates as high as 56 million192. In developing countries, publicly discuss and share results through a social audit. 15-20 percent of waste generated is managed by the informal Another option is procurement monitoring, which allows sector193. The informal sector most often exists when formal citizens, communities, or civil society organizations to systems are insufficient to meet urban sanitation needs, independently monitor procurement activities, such as of especially in rapidly urbanizing contexts194. private collection companies or infrastructure construction, to ensure funds are used according to rules and contracts. Local authorities can also publicly display information 6.3.1 Benefits of the informal sector about waste management projects and services in areas Cost Savings such as billboards, offices, schools, project sites, and other Since the informal sector collects a significant amount of points of community interaction with the government. local waste, they typically generate major cost savings By communicating with citizens and involving them in the for local governments. Informal sector costs are ‘privat- planning, iteration and accountability of waste manage- ized’ and thus typically do not utilize the municipal bud- ment systems, local authorities can deliver services that get195. Informal workers significantly reduce municipal are appealing to users, widely adopted and paid for and waste collection and transportation costs196. Waste pick- sustainable in the long term. ing activities also divert a significant percentage of waste 188 US$130 Million to Support Recycling and Improved Solid Waste Management in Morocco, World Bank, 2015; Kaza, S., et al. Five Ways to Increase Citizen Participation in Local Waste Services, World Bank Blogs, 2016 189 Scheinberg, A, M. Simpson, et al. Economic Aspects of the Informal Sector in Solid Waste Management. GTZ and CWG, 2010 190 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008 191 Wilson, David C., Adebisi O. Araba, et al., Building Recycling Rates through the Informal Sector, Waste Management, 2009 192 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008; Linzner, Roland, and Ulrike Lange, Role and Size of Informal Sector in Waste Management – a Review Proceedings of the Institution of Civil Engineers - Waste and Resource, 2013 193 Gupta, Sanjay, Integrating the Informal Sector for Improved Waste Management, Private Sector and Development, 2012 194 Farajalla, Nadim, et al., The Role of Informal Systems in Urban Sustainability and Resilience, Issam Fares Institute for Public Policy and International Affair (American University of Beirut), 2017; Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008 195 Wilson, David C., Adebisi O. Araba, et al., Building Recycling Rates through the Informal Sector. Waste Management, 2009 196 Scheinberg, A, M. Simpson, et al., Economic Aspects of the Informal Sector in Solid Waste Management, GTZ and CWG, 2010.; Informal workers are estimated to save 571 euros per worker. 144 6 Public participation and stakeholder engagement from landfills, thereby reducing landfill operational costs Table 11 Recycling rate by sector and extending the lifespan of landfills. The informal sector is estimated to prevent around 15 percent of waste from Percent of Total Recyclables going to landfill in Delhi and Bangalore, India, and Jakarta, Collected Indonesia197. While municipalities may incur expenses in City Formal Sector Informal Sector certain areas, such as cleaning up dispersed waste from Cairo, Egypt 31 69 waste picker sorting activities or operational delays at Cluj, Romania 38 62 dumpsites, typically the savings exceed costs. Lima, Peru 2 98 In many jurisdictions, avoided costs associated with infor- Lusaka, Zambia 69 31 mal waste workers reach millions of dollars per year. In Pune, India 0 100 Lima, Peru, the informal sector is estimated to save the Quezon City, Philippines 10 90 municipality 14 million Euros per year, in Cairo, Egypt esti- mated savings are 12 million Euros, and in Quezon City, Source: ‘Recovering Resources, Creating Opportunities’ by Gunsilius et al., 2011 Philippines savings are 3.4 million Euros annually198. Environment and supply chains. Since the informal sector often uses The informal sector is highly efficient in the recovery of manual collection methods and takes a local focus, infor- recyclables, especially in localities where household and mal activities typically reduce the fossil fuel usage that public source separation is not mandated. In low- and would otherwise occur to collect similar amounts of waste middle-income countries where public support for source formally. When the informal sector collects organic waste, separation is limited, formal sector-led recycling can lead it also reduces the carbon footprint of waste decomposi- to low recovery rates and poor quality of collected materi- tion at landfills and dumpsites203. als199. Recycling rates tend to be higher through the infor- Jobs and employment mal sector, which typically reach 20-50 percent200. The highest recycling rates are for bottles and glass, followed The informal waste management sector is a significant by plastics. In Beirut, Lebanon, informal sector recyclers employer in developing contexts. It is estimated that the are estimated to process 500 tonnes of recyclables per informal waste sector provides livelihoods for 15 million day, which exceed recycling rates by the formal sector201. people and around 0.5 percent of urban populations, often offering 10-49x more jobs than formalized waste manage- A comparison of recycling rates by informal sector and for- ment systems204. Informal workers are estimated to earn mal sector are summarized in Table 11. between US$1-15 a day, which is sometimes more than the The informal sector’s high recycling rates provide signifi- local minimum wage. Though costs are not factored into cant environmental advantages to cities. The informal sec- these wages, the informal sector is typically cost-minimal tor’s activities directly assist governments in achieving as it is motivated by profits and often operates manually. recycling targets and landfill diversion rates202. By increas- Informal waste management labour sustains communities ing the recovery of high-value materials, informal recyclers with income since informal sector workers often originate also help cities reduce the extraction of raw materials, from the same families and neighbourhoods. The sector which indirectly leads to energy savings from production also provides opportunities to those who may have limited 197 Sharholy, Mufeed, et al. ‘Municipal Solid Waste Management in Indian Cities – A Review.’ Waste Management, 2008; Van Woerden, Frank. Personal Communication. February 2021. 198 Scheinberg, A, DC Wilson, et al. Solid Waste Management in the World’s Cities. Earthscan for UN-Habitat, 2010. 199 Gunsilius, Ellen, Bharati Chaturvedi, et al., The Economics of the Informal Sector in Solid Waste Management, CWG and GIZ, 2011 200 Wilson, David C., Adebisi O. Araba, et al., Building Recycling Rates through the Informal Sector, Waste Management, 2009 201 Farajalla, Nadim, et al., The Role of Informal Systems in Urban Sustainability and Resilience, Issam Fares Institute for Public Policy and International Affair (American University of Beirut), 2017 202 Gupta, Sanjay, Integrating the Informal Sector for Improved Waste Management, Private Sector and Development, 2012 203 Farajalla, Nadim, et al., The Role of Informal Systems in Urban Sustainability and Resilience, Issam Fares Institute for Public Policy and International Affair (American University of Beiruit), 2017 204 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008; Scheinberg, A, DC Wilson, et al. Solid Waste Management in the World’s Cities. Earthscan for UN-Habitat, 2010; Linzner, Roland, and Ulrike Lange, Role and Size of Informal Sector in Waste Management – a Review Proceedings of the Institution of Civil Engineers - Waste and Resource, 2013 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 145 When waste systems are capacity- separate collection containers which were emptied by the informal sector prompting the municipality to replace the constrained or relatively immature, the open-top containers with smart deposit-type containers. informal sector can deliver high recycling Similar experiences have been observed in Bulgaria and rates and comprehensive waste services Belarus209. As a result, relationships between the informal to local communities. and formal sectors are often characterized by mistrust and competition210. access to more formal forms of employment. Due to its The informal sector can also pose a challenge for local gov- entrepreneurial nature, the informal waste sector tends to ernments that have partnered with private sector compa- be resilient and provide labour to meet cities’ needs when nies to deliver waste services. Especially in cases when political and economic shocks occur205. private sector companies are compensated by the quan- tity of waste collected or disposed of, or, when they are 6.3.2 Challenges given ownership over recyclable revenues, informal work- ers are in direct competition with the formal sector211. For Despite the significant benefits of the informal sector, example, in the European Union, new EPR laws that shift informal waste workers generate several challenges and accountability for material wastes from the consumer points of tension for local governments. When waste sys- to the producer create tensions between manufactures, tems are capacity-constrained or relatively immature, the which are accountable for collecting and reporting a cer- informal sector can deliver high recycling rates and com- tain quantity of waste, and informal workers, who gather prehensive waste services to local communities. However, recyclables from waste generators212. Private companies for contexts in which waste systems are formalized or in perceive waste pickers as ‘stealing the waste,’ especially the process of being so, the informal sector can collide when high-value wastes, such as e-wastes, are at stake. with both the public and private sectors. Even when collaborative opportunities exist, private recy- Since formal waste systems partially generate value in part cling companies sometimes hesitate to collaborate with from the sales of recyclable material, informal workers can the informal sector over concerns of perceived illegality213. significantly reduce the volume of materials available for Therefore, the design of private sector incentives is a crit- the formal sector to collect, thereby depriving formal col- ical piece in shaping the relationship between the public lection services of some revenue. Informal workers often and private sectors and the successful transition to privat- work at odd hours, accessing recyclables at formal collec- ization of waste services. tion points before formal collection services arrive206. For Both public and private entities may perceive street pick- instance, in Madrid, Spain, the informal sector removed ers as a nuisance in public spaces214. Waste pickers may cardboard from municipal containers and process them scatter undesirable content on streets while sorting and outside of the public waste stream207. The revenue from extracting valuable materials from mixed waste, and cardboard is reported to be significant and has promoted thereby generate additional clean-up costs for local gov- the Madrid municipality to seek assistance from local ernments, such as was initially the case with Borla Taxis police. In Ningbo, China208, the municipality rolled out in Ghana (see Box 21). Waste pickers’ carts and activities 205 Farajalla, Nadim, et al., The Role of Informal Systems in Urban Sustainability and Resilience, Issam Fares Institute for Public Policy and International Affair (American University of Beirut), 2017 206 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008 207 Harper, Jo, and Will Smale, The Millions Being Made from Cardboard Theft - BBC News, BBC News, 2020 208 Ningbo Municipal Solid Waste Minimization and Recycling Project, Implementation Completion and Results Report, ICR00005320, World Bank, 2020 209 Integrated Solid Waste Management Project, Implementation Completion and Results Report, ICR00002756, World Bank, 2018 210 Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, 2016 211 Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle- Income Countries: Review of Barriers and Success Factors, Waste Management, 2017 212 Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, 2016 213 Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle- Income Countries: Review of Barriers and Success Factors, Waste Management, 2017 214 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008 146 6 Public participation and stakeholder engagement Box 21 Borla taxis in Ghana paying to discharge it at formal disposal sites. They have also been reported to collect fees directly from users without pay- There are many examples of micro-enterprises in the infor- ing tax on this income. mal sector providing or supplementing formal service deliv- Consequently, in 2016, some assemblies (AMA) in pursuit ery, especially in emerging economies. These are termed of the ‘Clean Accra Project’ began the formal registration of ‘Borla Taxis’ in Ghana. Their numbers have grown over the Borla Taxis which operate within the Metropolis with the aim last 20 years, evolving from manual cart-pushers to moto- of identifying, coordinating, monitoring and controlling their rised tricycle operators. Borla Taxis offer households reliable activities. The registration was compulsory for all those oper- and affordable mixed household waste collections compared ating a tricycle or Borla Taxi within Accra. Once registered, to their formal counterparts. the operator is required to display an official sticker on their Borla Taxi operators are often seen on the streets of major cit- vehicle, provided free-of-charge. Refusal to register can lead ies and provide important niche waste management services, to prosecution, including seizure of the tricycle. particularly in low-income neighbourhoods in urban centres By 2018, the daily contribution of these informal service pro- in Ghana. Most of the operators are local residents and there- viders to MSW collection increased from 385 tonnes to 720 fore have an in-depth understanding of the waste manage- tonnes, and their overall contribution to MSW collection ment needs of the communities they serve. improved from 28 percent in 2016 to 47 percent in 2018. At However, their unregulated operations also posed some dif- the same time, the contribution of formal service providers ficulties. They have been criticised for disposing of the col- dropped in percentage points from 55 percent in 2016 to 48 lected waste in heaps at the city’s outskirts, rather than percent in 2018215. 215 Oduro-Appiah, Kwaku, et al., Working with the Informal Service Chain as a Locally Appropriate Strategy for Sustainable Modernization of Municipal Solid Waste Management Systems in Lower-Middle Income Cities: Lessons from Accra, Ghana, Resources, 2019 may also directly interfere with formal collection vehicles, waste management sectors, such as through mandatory public traffic, or daily landfill operations, such as compact- source separation, can focus on integrating the informal ing. These consequences of unorganized waste picking sector at key points of the value chain as part of the transi- can lead to a negative perception of the entire sector, as is tion. While effective strategies will vary by context, there the case in certain municipalities in Nigeria216. are several mechanisms that both local and national gov- ernments can employ to facilitate a successful integration 6.3.3 Opportunities for informal sector process. integration Policy and planning Given the efficiency of the informal sector in waste man- Governments with an active informal sector under their agement and the social and employment benefits that they purview should take a comprehensive approach to plan- generate, both local and national governments have good ning and integrate the informal sector in early stages of reason to integrate the informal sector into waste man- ambition-setting for the waste management sector. If the agement. Governments can reduce the cost of their waste activities of the informal sector are not taken into consid- management sector, accelerate the achievement of their eration, unintended side effects such as loss of recycla- environmental goals, and boost overall human develop- bles from publicly-accessible source separation sites and ment indicators by strategically mobilizing informal waste the formation of a parallel recycling system may occur workers. Local governments that have minimal source sep- even though the formal waste sector may have grown217. aration can focus on empowering waste pickers to maxi- Additionally, governments may experience a loss of jobs, mize their value while minimizing undesired side effects. social stability, and economic security for many of its Similarly, governments in the process of modernizing their residents. Imam, A., et al., Solid Waste Management in Abuja, Nigeria, Waste Management, 2008 216 Medina, Martin, Informal Recycling Sector in Developing Countries, GRIDLINES, World Bank, 2008 217 147 Recycling bottle caps for charity in Wroclaw, Poland> Photo: Denys Prokofyev | Dreamstime.com Governments should begin with a cohesive and enforced national waste management strategy or local waste man- agement plan that recognizes the informal sector. The plan should clearly delineate roles and responsibilities between different entities to prevent clashes, facilitate collabo- ration and align incentives218. This plan should forecast waste volumes, carefully plan out collection sites, map the flow of waste through the sectoral chain, and identify the stakeholders involved at each step. The plan should pin- point existing metrics, such as tonnes of waste generated or collected, and demographic information on the informal sector in order to track the progress of revised policies. Planning agencies should also contextualize informal sec- tor activities in their local and national legislative frame- works and environmental and social targets. It is critical associations and including them in municipal collection for new processes to be formalized through policies and and recycling programs221. regulations to ensure longevity. In the EU, Hungary, Slovakia, and Poland formed a trade association so that Centralized transparency from formal legal processes can materials collected by informal recyclers could be pur- also empower stakeholders to collaborate with the infor- chased and sold across boundaries legally219. This was a mal sector rather than compete. For example, in Pune, highly successful partnership that promoted economic India, the municipality worked with a local waste pick- activity and enabled governments to track the flow of ers union to develop a recycling program to meet national materials while empowering the informal sector. However, source separation guidelines222. The program has employed the initiative was not anchored in new laws and collapsed 3,500 workers, recycles 70,000 tonnes of waste per year, in 2012 when a newly elected political leader withdrew his and has led to new national legislation requiring all cities support – there were no formal policies or regulations to to register and integrate waste pickers into planning pro- uphold the market structure. cesses (see Box 22). Examples of successful integration of the informal sec- Public sector planning should occur through a partici- tor in national and local strategies include Costa Rica’s patory process and consultations with key stakeholders, National Solid Waste Management Strategy, which prior- including informal waste workers. Conversations with itizes the integration of the informal sector220. Through waste workers can reveal their priorities and constraints. the National Strategy for the Separation, Collection and For example, whereas some waste pickers embrace formal- Recovery of Waste, the country highlights recycling and ization or integration for better work conditions, others reduction of waste through the informal sector as a key prioritize individual entrepreneurialism and protecting tool on its path to carbon neutrality. The strategy has pro- profitability223. Promoting dialogue between private sector vided guidance for municipal master plans, which include and waste pickers also allows key actors to explore collab- the preparation of buy-back, sorting, and recycling cen- oration and leverage mutual strengths. Local governments ters in localities. Similarly, Peru’s Law N29419 supports should strive to maintain a regularized, stable and legal the authorization of informal recyclers and tasks local relationship and open channels of communication with governments in supporting the creation of waste picker informal workers as with private operators. 218 Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle- Income Countries: Review of Barriers and Success Factors, Waste Management, 2017 219 Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, 2016; Keep.eu., Project - Formalisation of Informal Sector Activities in Collection and Transboundary Shipment of Wastes in and to CEE, 2021 220 Gunsilius, Ellen, Sandra Spies, et al. Recovering Resources, Creating Opportunities. GIZ, 2011; The Economist Intelligence Unit. Progress and Challenges for Inclusive Recycling: An Assessment of 12 Latin American and Caribbean Cities. The Economist Intelligence Unit, 2017 221 Summary of the Regulatory Framework Pertinent to Waste Pickers (Law No. 29419). WIEGO, 2014 222 Parsons, Sarah, et al., Urban Transformations: In Pune, India, Waste Pickers Go from Trash to Treasure | World Resources Institute, World Resources Institute, 2019 223 Dias, Sonia, Waste Pickers and Cities, Environment and Urbanization, no. 2, SAGE Publications, July 2016; Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, 2016 148 6 Public participation and stakeholder engagement Box 22 SWACH an informal workers cooperative in Pune, India224 SWACH is a worker’s co-operative that provides waste col- also diversified into providing collection services for a range lection and recycling services in Pune, India. In a sense of new material streams, including sanitary waste, electrical its genesis was in 1993 when waste pickers and waste buy- and electronic equipment, clothing and composting. SWACH ers came together to form the Kagad Kach Patra Kashtakari has also established an education programme with schools. Panchayat (KKPKP), a membership-based trade union. Funding and in-kind support was provided by the Pune KKPKP worked to improve the working conditions of the infor- Municipal Corporation. Some small philanthropists sup- mal sector workers in the sector, many of whom are margin- ported specific activities and provided equipment and cov- alised members of society (e.g. 80 percent are women from ered training costs. However, funding is generated mostly lower castes in India). The movement provided membership through operational costs. Householders pay a monthly fee identity cards and worked hard to establish member’s rights of between Rs. 50 to Rs. 70 each month. The workers sup- to provide services and be recognised for the key service they plement this fee income with revenues from recyclable sales.  provide to the city. SWACH receives support from PMC to provide back-office staff for day to day field coordination, data monitoring and When the Indian government introduced the formal require- customer service, and the payment of health insurance for ment for segregated door-to-door waste collection in 2000, workers. This financial model provides a stable income for the KKPKP and Pune Municipality piloted SWACH, a wholly workers, substantially above typical income of autonomous owned workers co-operative that worked with the city gov- waste pickers. ernment to provide waste and recycling services as part of the city’s waste management service. SWACH illustrates an effective model for bridging the gap between the informal sector and municipal waste manage- SWACH has helped protect the rights and improve the work- ment service needs. The organisation has had considerable ing conditions of many waste pickers in the city of Pune. It success in helping waste pickers in the city transition from is understood that the KKPKP has over 9,000 members and scavenging to service provision, improving their working that SWACH has allowed 3,500 waste pickers to become ser- conditions, legitimising their work and securing access to the vice providers for door-to-door collection. The organisation materials which they depend upon to earn a living. has continued to grow its activities over recent years and has 224 About SWaCH, SWaCH, 2020 Organization and cooperation charging users and selling recyclables225. Where CBOs do not exist, the public sector may look to supporting the for- Organization is the key for drawing on the strengths of the mation of small businesses or cooperatives. Local agen- informal sector to strengthen the entire waste manage- cies may then directly partner with these semi-formal ment sector. Collectives empower individual workers to associations for waste management services. gain scale, share information, and increase market access. Business and public sector partners that may be hesitant Municipalities can maximize the productivity of semi-for- to work with an individual may be willing to collaborate mal associations by providing contracts, offering access to with an association that has credibility. Through collabo- credit and resources, and supporting growth and training. rative organizations, market linkages can be strengthened To begin, local governments can carve out service roles between public, private, and informal actors. and niches in collection and recycling for waste coopera- tives to add value. From there, they can offer waste picker One form of association is a community-based organiza- associations contracts for performing desired services tion (‘CBO’), which often form organically without pub- while still working in an entrepreneurial capacity. These lic sector involvement in areas where basic municipal contracts shift waste picker economics by reducing finan- services are nascent. CBOs generate income by directly cial uncertainty and expanding access to markets. Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle- 225 Income Countries: Review of Barriers and Success Factors, Waste Management, 2017 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 149 In many cities in Brazil, such as Diadema, waste picker strengthen business capacities by providing training on associations are assigned a coverage area to collect waste. the technical aspects of improving the quality and effi- They are paid a fixed fee for collection and a recycling ciency of sorting, crushing, and pelleting, the management bonus based on amount of waste diverted from landfills components of achieving long-term financial sustainabil- (see Box 23)226. In the Philippines, informal waste workers ity, and essential skills in marketing, health and safety, at a materials recovery facility are not paid a salary, but and legal compliance230. They can also provide information rather receive payment for the value of materials recov- on local recycling markets and prices to forecast demand. ered through sorting227. Many successful cases are ones Local governments may consider partnering with an NGO in which municipalities have integrated former dump- to provide capacity building. site or street waste pickers into higher levels of the waste value chain. This is the case in Azerbaijan228 where pick- Governments can also simply provide waste associations ers at the Baku main dumpsite were offered employment formal rights to waste at the source, which provides a guar- at the newly constructed material recycling facility when anteed access to waste. For example, in Bogota, Colombia, the dumpsite was rehabilitated and converted into a sani- the Appellate Court removed exclusive right over waste tary landfill. Many accepted and benefitted from improved from municipal contractors, which permitted the informal health and environmental conditions. sector to gain access to resources231. Similarly, in 2006, the Pune Municipality in India granted waste pickers the Municipalities can improve the efficiency of semi-formal right to collect waste and a service fee from households. organizations with equipment and credit. Working as mem- bers of an association rather than as individuals, informal Waste entrepreneurs can be extraordinarily successful. workers may offer improved creditworthiness and can col- By simply supporting entrepreneurs, governments can lectively utilize capital and equipment to achieve scale. achieve high levels of efficiency and organization. For Municipal governments can support waste cooperatives by example, EazyWaste in Ghana is a start-up that has devel- providing micro-credit opportunities directly or by partner- oped 7 recycling centers and a mechanism for recyclers to ing with local financial institutions. For example, in Serbia, communicate with operators and locate recycling centers the Fair Waste Practices program integrates waste pick- via a mobile app232. The local government has partnered ers into the service chain and provides micro-credit loans with the small business to conduct community education for recyclers through the bank MicroFinS for both individ- campaigns. Similarly, Khaalisisi Management in Nepal is a uals and collectives229. Municipal governments can also digital platform that allows households to request waste directly provide access to equipment and facilities for sort- pickup from waste collectors233. The platform has helped ing, aggregation and storage at transfer stations and land- over 13,000 individuals transition from scavenging to a fills. In Morocco, the National Solid Waste Management dignified livelihood. In Bangladesh, Waste Concern is an Plan targeted informal waste worker inclusion. Through NGO that trains waste pickers in organizing waste recy- the Attawfouk Cooperative of waste workers, former land- cling to produce compost, which is then sold to large fer- fill waste pickers transitioned to work at a new sorting facil- tilizer companies. ity that provided more efficient recycling equipment and Local governments can put local expertise to good use safer conditions. Access to transportation equipment such toward modernizing the waste management sector by sim- as carts and vehicles can also help cooperatives scale vol- ply facilitating market development and entrepreneurship. ume and improve the quality of their services. By viewing informal workers as partners and innovators Training is another powerful mechanism for empower- rather than victims and disadvantaged, informal integra- ing informal waste worker associations. Governments can tion programs have a much higher likelihood of success234. 226 Yates, Julian S., and Jutta Gutberlet, Enhancing Livelihoods and the Urban Environment: The Local Political Framework for Integrated Organic Waste Management in Diadema, Brazil, Journal of Development Studies, 2011 227 Scheinberg, A, M. Simpson, et al. Economic Aspects of the Informal Sector in Solid Waste Management, GTZ and CWG, 2010 228 ARP II- Integrated Solid Waste Management Project, Implementation Completion and Results Report, ICR00004491, World Bank 2019 229 Inclusion of Informal Collectors into the Evolving Waste Management System in Serbia, GIZ, 2018 230 Gunsilius, Ellen, Sandra Spies, et al., Recovering Resources, Creating Opportunities, GIZ, 2011 231 Gupta, Sanjay, Integrating the Informal Sector for Improved Waste Management, Private Sector and Development, 2012 232 EazyWaste website, 2020; 2020 World Bank Youth Innovation Contest Submission 233 Khaalisisi website, 2020; 2020 World Bank Youth Innovation Contest Submission 234 Scheinberg, Anne, and Justine Anschtz, Slim Pickin’s: Supporting Waste Pickers in the Ecological Modernization of Urban Waste Management Systems, International Journal of Technology Management & Sustainable Development, 2006 150 6 Public participation and stakeholder engagement Box 23 The evolution of Brazil’s informal sector Brazil’s waste picker cooperatives are perhaps one of the easier to contract waste picker cooperatives237. In 2012, the best illustrations of the importance of the informal sector in Observatory for Inclusive and Solidarity Recycling (ORIS) municipal services. Waste pickers in Brazil began organising was formed, based on the need for a dedicated space for in associations and cooperatives from the late 1990s, receiv- reflection and discussion on actions to include waste pick- ing help from catholic groups known as Street Pastoral. The ers in formal solid waste management systems238. ORIS also rising development of the waste picker movement prompted provides support to the informal sector in the form of internal the need to create a multi-stakeholder forum to discuss strat- and external seminars and technical guidance. As the infor- egies for integration of new waste pickers’ organisations. In mal sector co-operatives often lack the technical capacity to 1997, UNICEF convened several Brazilian institutions to con- meet the demands placed upon them by municipalities and stitute the National Waste and Citizenship Forum (FL&C, in state bodies, ORIS plays a key role in supporting them. Portuguese). The Forum rapidly gained traction in several states and municipalities with waste picker participation and Individual Brazilian states also can set up their own policies the National Waste Pickers Movement (MNCR in Portuguese) to incentivise the creation of waste picker cooperatives. For was created in 1999 235. The first FL&C national negotiation example, in Minas Gerais, the ‘Bolsa Reciclagem’ (recycling with the Brazilian Government was to eradicate child labour bonus) was approved in 2011, which established a monetary from dumpsites and encourage them to attend schooling incentive to be paid by the state government to waste pickers instead. In the next presidential election the MNCR received who are members of a cooperative or workers’ association. The the support of most candidates who agreed to the institution- payment is due at the end of a three- month period of work. alisation of an inclusive and community-oriented recycling It is the first law approved in the country that authorizes the policy. In response to this, the Inter-ministerial Committee use of public money for ongoing payments for environmental for Socio and Economical Inclusion of Waste Pickers (CIISC in work done by waste pickers. While payment for the service col- Portuguese) was created in 2005. lection/provision comes from municipal budgets, the recycling bonus is a separate revenue stream for cooperatives and comes Several programs were developed and funded by the CIISC from the state of Minas Gerais budget as a compensation for to consolidate and organise waste picker cooperatives and to protecting the environment. In order to receive the bonus, the enable them to work in decent conditions236. The further rec- cooperative or association must demonstrate that it is in good ognition and integration of waste pickers has gradually con- legal and administrative standing. tinued through public policies that seek their inclusion. For example, the National Sanitation Policy formally recognised The bottom-up pressure from ORIS, the MNCR and the FL&C waste pickers as agents of the sanitation system in 2007. over the years, coupled with a national government sym- In 2010, the National Solid Waste Policy further detailed pathetic to the cause, has allowed significant advances for their role, and allowed municipalities to contract waste waste picker cooperatives throughout Brazil and they now picker cooperatives to collect and sort recyclable residen- form a major, recognised part of waste management activi- tial waste without a competitive bidding process, making it ties in the country. 235 Lima, Nathalia Silva de Souza, and Sandro Donnini Mancini, Integration of Informal Recycling Sector in Brazil and the Case of Sorocaba City, Waste Management & Research, 2017 236 Rutkowski, Jacqueline E., and Emília W. Rutkowski, Expanding Worldwide Urban Solid Waste Recycling: The Brazilian Social Technology in Waste Pickers Inclusion, Waste Management & Research, 2015 237 Ibid 238 Rutkowski, Emilia, et al., Brazilian Observatory for Inclusive and Solidary Recycling, Conference: 5th International Conference on Sustainable Solid Waste Management, 2017 Recognition and social protection often hail from the lowest caste239. In Europe, waste pick- ers are commonly from the Roma ethnic minority240. Waste Despite the significant benefits of the informal sector, pickers also tend to include vulnerable populations such informal waste workers themselves experience many as women, children, and the elderly – populations that challenges. From a social perspective, waste pickers are most local governments aim to protect. The welfare of often socially marginalized. Waste pickers are commonly workers in the informal economy can influence the reputa- migrants, new residents of cities from rural areas or people tion of a city as a whole. groups of low status. For example, in India, waste pickers 239 India – Global Alliance of Waste Pickers, Global Alliance of Waste Pickers, WIEGO, 2020 240 Gunsilius, Ellen, Sandra Spies, et al., Recovering Resources, Creating Opportunities, GIZ, 2011 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 151 When it comes to infrastructure and social services, infor- resource-limited and it is not unusual for waste pickers to mal waste workers commonly experience a lack of proper be unregistered residents. However, it would be difficult housing, water, and sanitation, especially for waste picker for local governments to accomplish the social, economic, families that live close to dumpsites241. Educational oppor- and environmental goals set forth in their master plans tunities tend to be scarce amongst workers and their chil- without addressing the conditions of those who work in dren. Their employment position can be insecure with the informal waste sector. unsteady wages and fluctuations in markets and policies. Local governments can begin by exploring basic social pro- Waste pickers also tend to have minimal access to finan- tection schemes and safety nets for informal workers. Social cial capital and equipment. recognition begins with legal identification. The ‘Linis Waste pickers suffer severe health risks in their work. Ganda’ program in the Philippines, for example, aimed to Their occupational safety risks include exposure to toxic empower waste pickers in several ways, including provid- fumes and bacteria, interactions with sharp objects such ing workers with uniforms, carts, and identification cards. as needles and broken glass, and injury from collisions Formal identification allowed workers to access more cus- with trucks and even garbage landslides at dumpsites242. tomers and enter private properties to collect waste. As a result, waste pickers suffer high rates of musculo- Going beyond personal identification, local governments skeletal ailments, ophthalmological and respiratory infec- can legally recognize informal recycling as an official occu- tions, and gastroenterological and skin problems and pation. Occupational recognition can play a role in shifting waste picker lifespans are significantly shorter than those perceptions, driving more favourable policies and improv- of the greater population243. Informal waste workers are ing the productivity of the sector. In Lusaka, Zambia, shift- rarely covered by formal healthcare systems. ing terminology for waste pickers from ‘illegal collectors’ Waste picking work is also socially stigmatized due to to ‘unregistered informal collectors’ played a significant its association with waste. As a result, citizens, govern- role in stimulating recognition247. In Brazil, by intro- ment workers and private sector agents are often hos- ducing informal recyclers as a category in the Brazilian tile to informal waste workers244. A study in Algeria and Classification of Occupations, statistics on waste pickers Jordan found that waste pickers are often arrested or were made available and updated over time248. fined245. Waste pickers, especially those at lower levels of By introducing measures that reduce the social stigma the value chain, often suffer from low self-esteem due to attached to waste pickers and promote their public accep- social rejection and discrimination. Given their low sta- tance, local governments can not only improve their wel- tus, waste pickers generally have a weak bargaining posi- fare but also improve household engagement in waste tion with politicians and with middlemen in the recyclable management overall. Governments can conduct educa- materials trade, especially if they work alone246. tional campaigns with citizens on the waste manage- Improving the welfare of informal waste workers ment system, specifically acknowledging the benefits of can be complex, as local governments are typically waste pickers, and build awareness of the importance of 241 Scheinberg, A, M. Simpson, et al., Economic Aspects of the Informal Sector in Solid Waste Management, GTZ and CWG, 2010; Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle-Income Countries: Review of Barriers and Success Factors, Waste Management, 2017; Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, 2016 242 Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle- Income Countries: Review of Barriers and Success Factors, Waste Management, 2017; Kaza, Silpa, and Lisa Yao, Landslides, Dumpsites, and Waste Pickers, World Bank Blogs, 2018 243 Gupta, Sanjay, Integrating the Informal Sector for Improved Waste Management, Private Sector and Development, 2012; Cointreau, Sandra, Occupational and Environmental Health Issues of Solid Waste Management: Special Emphasis on Middle- and Lower-Income Countries, Urban Papers 2, World Bank, 2006; Bernstein, Susan. Toolkit: Assessment and Public Participation in Municipal Solid Waste Management. World Bank, 2004 244 Scheinberg, A, M. Simpson, et al., Economic Aspects of the Informal Sector in Solid Waste Management, GTZ and CWG, 2010; Aparcana, Sandra, Approaches to Formalization of the Informal Waste Sector into Municipal Solid Waste Management Systems in Low- and Middle-Income Countries: Review of Barriers and Success Factors, Waste Management, 2017 245 Scheinberg, Anne, Rachel Savain, and Aziz Alaoui, Valuing Informal Integration, Inclusive Recycling in North Africa and the Middle East, GIZ, 2015 246 Scheinberg, Anne, Jelena Nesić, Rachel Savain, et al., From Collision to Collaboration – Integrating Informal Recyclers and Re-Use Operators in Europe: A Review, Waste Management & Research, no. 9, SAGE Publications, July 2016 247 Scheinberg, A, M. Simpson, et al., Economic Aspects of the Informal Sector in Solid Waste Management, GTZ and CWG, 2010 248 Dias, Sonia, Construindo a Cidadania: Avanços e Limites Do Projeto de Coleta Seletiva de Belo Horizonte Em Parceria Com a Asmare. (Master Thesis), Federal University of Minas Gerais, 2002 152 6 Public participation and stakeholder engagement recycling and source separation249. Public entities can the management of waste in the household. Employment also offer health services, legal protection and alterna- opportunities also vary significantly by gender, with tive employment training. To address the problem of local women commonly holding lower status roles with lower child labor, education programs and childcare can help pay. In the informal sector, men often occupy a position waste picker families access more economically produc- of advantage. By understanding gender differences in the tive livelihoods across generations. waste management sector, local governments can not only improve public education and the efficacy of services, but Beyond direct interventions, local governments may also also strengthen the livelihoods of vulnerable groups and look towards the private sector. Social protection can advance gender equality. emerge organically through local entrepreneurship, which generates new jobs and tax revenue whilst improving infor- Social connections to the waste sector mal workers’ welfare. An example of a successful innova- Around the world, it is common for women to manage tion in informality and social protection is Soso Care, a household waste. Women often assume the role of clean- start-up in Nigeria that provides health insurance and food ing, cooking, and domestic maintenance, and are thus stamps to informal recyclers250. By depositing their recy- often responsible for separating and disposing of waste. A clables at a Soso Care recycling site, the recycler’s account recent study found that women were the sole manager of is credited with grocery credits or health insurance cred- household waste in 95 percent of households in Bangalore, its for services at a health management organization. India and 75 percent in cities in Indonesia253. Similarly, WasteCoin is a start-up in Indonesia that allows citizens to exchange recyclables for financial credits in Based on their differing social roles and responsibilities a digital wallet251. For many waste pickers, WasteCoin is in society, men and women often have different priorities their first bank account. Finally, in Indonesia, Banda Aceh related to the waste system. For example, a woman may Plastic Recycling employs former waste pickers at a recy- prefer to convert organic waste to sellable compost, while a cling plant, providing free elementary school education man may prefer to utilize organic waste to feed a pig farm254. and vacation time in addition to a steady salary252. Similarly, men and women may be affected differently by the design of municipal waste services. Women may prefer As societies mature and formalize waste management ser- door-to-door waste collection based on their limited mobil- vices, strategic integration of the informal waste economy ity and frequent usage, while men may prefer centralized is critical for a smooth human and environmental tran- drop-offs with lower costs. In Ecuador, men and women sition. By empowering the informal sector and finding were found to have different preferences for how frequently ‘win-win’ outcomes, municipal governments can provide waste should be disposed of, distance to travel, and time trustworthy and efficient waste management services, nur- spent managing waste, and women considered waste dis- ture the local economy and create jobs, and do their part posal to be more time consuming than did men255. in making progress toward the international Sustainable Development Goals. In Europe too, gendered attitudes and behaviours towards waste avoidance were found, with women more inclined 6.4 Gender in Waste Management toward taking environmental considerations into account when making consumption and disposal decisions256. At the same time, the study found that men and women 6.4.1 Gender impacts in waste management have different perspectives on approaches to waste man- While waste management is a universal service that effects agement, finding that women cited priorities linked to all citizens, there are distinctions in how men and women behavioural change and men citing priorities linked to experience the waste management sector. Social struc- improved operations. Based on these insights, gendered tures have led men and women to play different roles in differences can have strong implications on the optimal 249 Zurbrügg, Christian, et al., Determinants of Sustainability in Solid Waste Management – The Gianyar Waste Recovery Project in Indonesia, Waste Management, 2012 250 Soso Care Website, 2020; 2020 World Bank Youth Innovation Contest 251 2020 World Bank Youth Innovation Contest 252 Röchling Stiftung GmbH, The Waste of Others. Röchling Stiftung GmbH and Wider Sense GmbH, 2020 253 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 254 Scheinberg, A, et al. Gender and Waste, University of Washington, 1999 255 Grieser, Mona, and Barbara Rawlins, Issues in Urban and Rural Environments: GreenCOM Gender Report, USAID, 1996 256 Buckingham , Susan, and Michelle Perello, Gender Mainstreaming in Waste Planning, European Union and Urban Waste, 2019 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 153 Figure 9 The role of gender in waste management Formal occupations Indonesia Philippines Vietnam India Formal waste collectors n Male n Female M: 97.2% F: 2.8% M: 95% F: 5% M: 57.7% F: 42.3% M: 100% F: 0% Source: ‘The Role of Gender in Waste Management’ by The Ocean Conservancy, 2019 design and targeting of local waste services. By imple- comes to ownership. In several countries, businesses at menting gender-balanced consultations, local govern- the end of the recycling value chain, including scrap deal- ments can better achieve desired outcomes through waste ers, aggregators, and pre-processors, have registered male education and interventions that recognize unique needs owners in almost all cases. It is often harder for women to and preferences. form a business due to difficulty in accessing capital and equipment, and as a result, women are virtually absent Gender in formal waste management employment as operators of landfills or owners of material processing Gender differences in waste management also extend to companies. formal employment. It is often seen that existing inequal- Gender in informal waste management ities in social and economic structures shape wom- en’s experiences in employment in waste management. Gender inequalities are particularly pronounced in the Formal waste collection tends to be a male profession, and informal sector. Many studies have found that women women are less likely to be found in supervisory or mate- have majority representation in informal roles. In some rial roles in private waste firms257,258. In the formal waste Indian cities, for example, around 80 percent of waste system, men and women are often found performing dif- pickers are women and amongst a sample of waste picker ferent tasks. Men are most commonly found employed in collectives in Brazil, 56 percent were women260. Women tasks that involve carrying heavier loads and operation may be highly represented in waste picking since infor- of machinery, such as loading and unloading of trucks. mality gives them the flexibility to balance income-genera- Women are more often tasked with conversion of recy- tion with their non-paid domestic responsibilities. For the clables to products or feedstock and in time-consuming same reason, however, women recyclers often work fewer tasks that require fine motor skills and repetition, such as hours than their male counterparts, receive lower pay and cleaning and sorting. Women are also often tasked with have weaker bargaining power261. administrative duties and have limited participation at the As with the formal sector, men often have positions of leadership level. advantage in the informal waste sector, having more As a result, studies have found that men find it easier to control over high-value waste material for recycling and seek formal employment in waste management. In sev- taking on more lucrative and safer roles than women262. eral countries, almost all formal waste collectors were Women often sort through and dispose of residual men (see Figure 9), and a survey of waste employers in waste. In Mexico, a hierarchy was observed in which a the Philippines revealed that employers would prefer to male leader and those close to him accessed high qual- employ men over women259. Similar trends exist when it ity materials while women received less valuable waste 257 Abarca, Lilliana, and Chrisje Van Schoot, No Capacity to Waste: Training Module Gender and Waste. Gender and Water Alliance, 2010 258 Gender and Waste Nexus: Experiences from Bhutan, Mongolia and Nepal, UNEP-IETC and GRID-Arendal, United Nations Environment Programme (UNEP), 2019 259 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 260 Dias, Sonia, and Lucia Fernandez, Powerful Synergies: Gender Equality, Economic Development and Environmental Sustainability, United Nations Development Programme, 2012 261 Kusakabe, Ken, and Veena N. Gender Equality in Urban Environmental Management: A Casebook. Asian Institute of Technology 262 Gender and Waste Management, International Environmental Technology Centre (IETC), 2016 154 6 Public participation and stakeholder engagement and sorted through waste from poor neighbourhoods and socially dependent concepts, gender policies and prac- hospitals.263 In the Philippines, women were found to tices can be highly influenced by the people lead their sort and hand over small batches of recyclables to men design, each of whom holds unique views on gender based to aggregate. Given their proximity to mixed and resid- on their own identities. In this way, diversity in planning ual wastes, women waste pickers are often disproportion- can beget diversity in outputs. ately exposed to toxic chemicals, infectious organisms and At a local level, governments and planners can promote associated health risks. gender-inclusive waste management practices in six key Female leadership is also uncommon on rubbish dumps. areas, described below. Waste picker women are not only subject to gender biases Consultation and power asymmetries264 but often have less access to skill-building experiences. They are often excluded from Local waste initiatives should integrate both genders’ pri- decision-making process and do not have the capacity to orities and views into waste planning. By involving both negotiate materials trade deals with local authorities265. men and women in waste management decision-mak- Several studies have found that capital is another factor ing, authorities can improve division of responsibili- in explaining unequal access to scale. Vehicles and equip- ties, ensure fair access to resources, create empowering ment are disproportionately owned by men; women tend employment opportunities, and increase social inclusiv- to use baskets and sacks for collection while men have ity in the waste sector. Gender balanced consultations can more access to carts and tricycles266. As waste systems lead to a broad mix of policies and designs that cater to formalize and become legitimized, the new jobs are over- diverse preferences and needs, thereby effectively achiev- whelmingly taken by men, even ones previously performed ing environmental and sanitation goals and strong public by women on an unpaid basis, such as street cleaning267. relations. Consultations in program development can also Biases, skills gaps, and access to equipment all must be strengthen ownership and cohesion in the implementation addressed to increase women’s access to job security and process269. For example, a recycling initiative in Vietnam advancement in waste management work. that engaged the Women’s Union led to a strong uptake in source separation in addition to building visibility for 6.4.2 Actions toward gender-inclusive waste women’s leadership (see Box 24). management Local authorities can begin by understanding the context At a national level, the governments should set standards of gender relations and social norms, since no two local- for gender inclusion nationwide, such as through a gen- ities are alike and since norms change over time270. This der strategy. These national standards can then inform information can provide officials with an understanding of local plans and tactics to achieve gender goals, and lead sources of vulnerabilities as well as mentalities to navi- to coordinated efforts in disparate localities. The national gate. Given that women are often the marginalized gen- government may also encourage local authorities them- der in the waste sector, officials should specifically consult selves adopt gender-sensitive practices, ensuring that the women (and other marginalized groups) to ensure that entities tackling gender-sensitive issues in waste man- their needs and status are deliberately protected271. agement are themselves exemplifying inclusivity268. As 263 Gender and Recycling: Tools for Project Design and Implementation, Regional Initiative for Inclusive Recycling, Inter-American Development Bank, 2013 264 Dias, Sonia, and Lucia Fernandez, Powerful Synergies: Gender Equality, Economic Development and Environmental Sustainability, United Nations Development Programme, 2012 265 Gender and Recycling: Tools for Project Design and Implementation, Regional Initiative for Inclusive Recycling, Inter-American Development Bank, 2013 266 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019; Gender and Recycling: Tools for Project Design and Implementation, Regional Initiative for Inclusive Recycling, Inter-American Development Bank, 2013. Abarca, Lilliana, and Chrisje Van Schoot, No Capacity to Waste: Training Module Gender and Waste, Gender and Water Alliance, 2010 267 Gender and Waste Nexus: Experiences from Bhutan, Mongolia and Nepal, UNEP-IETC and GRID-Arendal, United Nations Environment Programme (UNEP), 2019; Kusakabe, Ken, and Veena N., Gender Equality in Urban Environmental Management: A Casebook, Asian Institute of Technology 268 Buckingham , Susan, and Michelle Perello. Gender Mainstreaming in Waste Planning. European Union and Urban Waste, 2019. 269 Muchangos, Letícia Dos, and Philip Vaughter, Gender Mainstreaming in Waste Education Programs: A Conceptual Framework, Urban Science, 2019 270 Recognizing Gender Issues in the Management of Urban Waste; Water, Engineering and Development Centre (WEDC) and Department for International Development (DFID), 1998 271 Gender and Waste Nexus: Experiences from Bhutan, Mongolia and Nepal, UNEP-IETC and GRID-Arendal.  United Nations Environment Programme (UNEP), 2019; Kusakabe, Ken, and Veena N., Gender Equality in Urban Environmental Management: A Casebook, Asian Institute of Technology Bridging the Gap in Solid Waste Management | Governance Requirements for Results 155 Box 24 Women-led community recycling in Da Nang, Vietnam272,273 Da Nang is Vietnam’s 5th largest city with 1.1 million peo- national political organization that advocates for women’s ple, located on the coast with a vibrant tourism economy. The interests – has a track record of advocacy for environmen- city’s solid waste management strategy highlights the com- tal causes. mitment by the government and local residents to improved The project engaged the Women’s Union to inform the design waste management and recycling. of the program, including household targeting and incentives Despite its aspirations toward becoming a ‘Green City,’ Da design, communications strategy development, and opera- Nang faces several constraints, including it having a land- tional planning for the waste separation and recycling model. fill which is operating at full capacity, a 5-7 percent recycling The Women’s Union was later tasked with the implementa- rate and low public awareness of waste management issues. tion of the project including educating households on the Additionally, the city’s tourism economy requires clean cities environmental impacts of plastic pollution, acquiring house- and beaches. hold commitments to separate waste, collecting and sorting waste, and finally monitoring and reporting on impact. In 2017, government officials partnered with USAID to imple- ment a community-based recycling project to make progress Over 20,000 households, in addition to fishing boats, mar- toward the city’s recycling and waste management targets. kets, schools, and hotels have been engaged in source sep- The project was implemented in two districts, Son Tra and aration and recycling. To this day, the system continues to Thanh Khe, and specifically engaged women at the center of provide income to waste collectors and dealers. City leaders the project through a participatory process. have begun to expand this women-led community engage- ment model to other parts of the city and other local govern- The recycling initiative targeted women based on a recogni- ments have begun to replicate the pilot as well. tion that women heavily inform practices on recycling due to local social norms, were open to mobilizing toward action, By empowering women to lead in improving critical urban and held pro-environmental attitudes. Across Vietnam, services, the Da Nang project extended the traditional role of women play a key role in waste management, accounting women in household waste management to broader positions for 35-50 percent of formal waste collectors and 65 percent in the recycling value chain, for the betterment of the commu- of the informal sector. Additionally, the Women’s Union – a nity and of the environment. 272 McTarnaghan, Sara, and James Williams, Behavior Change in Local Systems to Mitigate Ocean Plastic Pollution, USAID, 2020 273 Building a Green City Through Women-Led Plastic Recycling, USAID, 2020 Employment necessary technical and managerial skills to access resources, negotiate with stakeholders, and make Local governments can also seek gender parity in employ- informed decisions275. Leadership training can also build ment in waste management. Both formal and informal capacity so that women can take on higher status roles and employment arrangements account for a significant por- compensate for the fact that women may not naturally be tion of gender disparity in waste management, providing as exposed to markets and opportunities276. Governments an opportunity for local action. At a municipal level, gov- can also structure the location of infrastructure and jobs ernments can start by setting incentives in gender par- to cater to constraints faced by women. For example, in ity in employment areas. For example, an EBRD project Vietnam, a proposal to relocate waste aggregation sites in Georgia recommended that the landfill management and junk shops outside of city boundaries is being chal- company adopt an equal opportunity policy for men and lenged as it will limit women waste pickers and sellers’ women274. who are less mobile277. Governments can also use training to strengthen access Finally, local governments can empower marginalized gen- to jobs. Training programs can help women build the der groups through formalization or semi-formalization in 274 Mainstreaming Gender in Waste Management Projects, European Bank for Reconstruction and Development, 2011 275 Gender and Recycling: Tools for Project Design and Implementation, Inter-American Development Bank, Regional Initiative for Inclusive Recycling, 2013 276 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 277 Ibid 156 6 Public participation and stakeholder engagement order to improve bargaining power and wages. Workers prices and locations of trade, as well as safe work environ- can benefit both from cooperatives as well as formal ments that include protective gear and sorting machinery agreements for work. Members of Solid Waste Collection to reduce barriers of access to certain jobs. and Handling (SWACH), a waste picker collective in India, However, local institutions must ensure that the introduc- earned 2-3 times more through the cooperative than before tion of machinery and technology do not reinforce wom- the cooperative began278. en’s socio-economic disadvantages. While access to tools Capital and economic access reduces the focus on physical strength in waste manage- ment roles, they may also create structures in waste jobs Empowerment security goes hand in hand with access that preferentially advantage men. Especially if automa- to resources. To begin, governments can support gen- tion leads to reduction in jobs, governments must ensure der parity in access to physical resources such as carts, that women have access to new employment opportuni- bicycles, and motorized vehicles that are used to process ties. Automation and downsizing of the labour force can heavy loads and scale up waste management businesses. affect women more than men, since men often get prefer- As women are traditionally less represented in waste busi- ential access to formal jobs in waste280. ness ownership, equality would also be advanced through financial institutions that ensure that men and women An example of a government-led initiative that significantly have equal access to financial resources. For example, strengthened women’s roles in waste management through Peru’s La Caja Nuestra Gente provides loans to men and employment opportunities, capital and elevated status is women equally279. Institutions should also ensure that the waste bank program in Indonesia (see Box 25). women have fair access to information, such as recyclable 278 Allen, Cecilia, et al., On the Road to Zero Waste: Success and Lessons from Around the World. Global Alliance for Incinerator Alternatives, 2012 279 Gender and Recycling: Tools for Project Design and Implementation, Regional Initiative for Inclusive Recycling, Inter-American Development Bank, 2013 280 Recognizing Gender Issues in the Management of Urban Waste; Water, Engineering and Development Centre (WEDC) and Department for International Development (DFID), UK Department for International Development, 1998 Box 25 Waste Banks: An accelerator for women waste entrepreneurs in Indonesia In Indonesia, women play a central role in the management of aggregated, and ultimately sold to the city government for household waste. However, their employment opportunities a standard price283. An individual’s balance in a waste bank in the formal waste sector are limited. Due to a perception can be exchanged for cash, and sometimes goods and ser- that they lack the strength and stamina to perform collec- vices such as healthcare and phone cards. It is estimated that tion tasks, women are rarely employed in the formal sector. there are 2,800 waste banks serving 175,000 account hold- Women are active in the informal sector, although they are ers across Indonesia284. It is the role of each city in Indonesia often left to collect lower-value recyclables than men and to determine its plan and action to divert waste from land- often receive less favourable prices from buyers281. fills, such as through the support of waste banks. Waste Banks are a solution in Indonesia that has empowered In Indonesia, waste banks are disproportionately owned and women in the waste management industry. First introduced used by women. It is estimated that 50 percent of the owners of by the Ministry of Environment and Forestry in 2008282, waste banks are women, and that 75 percent of the customers waste banks allow individuals to exchange waste for a finan- are women285. Some banks, such as the ‘Sakinah’ Waste Bank cial credit in an account, a mechanism that is similar to a in Tugu Village, directly aim to empower women as their cen- regular bank deposit. Residents can bring organic waste, tral goal286. These waste banks provide women with dignified which is composted, or dry recyclables, which are sorted, employment and income opportunities. Women commonly use 281 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 282 Gender-Specific Consumption Patterns, Behavioural Insights, and Circular Economy. 2020 Global Forum on Environment, OECD, 2020 283 Salim, Randy, Waste Not, Want Not: ‘Waste Banks’ in Indonesia, World Bank Blogs, 2013; Rosengren, Cole, Trash Banking Takes off around the World, Waste Dive, 2016 284 Negi, Ashish, This Asian Bank Lets You Borrow Cash and Pay in Trash, BloombergQuint, 2016 285 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 286 Suparmini, Purnawan, The Role of Waste Bank Partnership in Efforts to Decrease Waste Volume in Urban: A Case Study at a Waste Bank in Kalibaru, Cilodong, Depok City, Earth and Environmental Science, 2018 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 157 Box 25 Cont. revenue from waste banks to acquire basic resources to sup- women in the waste sector. Countries across the world – such port their families as well as capital to start small businesses. as Ghana, Colombia, and India – have developed similar sys- Waste banks have also allowed many formerly socially margin- tems. One of the core components of a current World Bank alized waste pickers to find solidarity and resilience from a pre- project in Indonesia strives to scale up waste banks in addi- viously socially marginalized status287. Women’s engagement tion to other employment opportunities for women in waste in waste banks also provides a role model effect that normal- management as way to support the government in reaching izes women’s income-generation from waste entrepreneurship. its national target of 30 percent waste reduction and recy- cling by 2025288. National and local government support of economic structures such as Waste Banks is critical to support the livelihoods of Ni’mah, Nuzuli, and Lena Keller-Bischoff, Java’s Waste Banks, Inside Indonesia, 2020 287 Project Appraisal Document: Improvement of Solid Waste Management to Support Regional and Metropolitan Cities in Indonesia (P157245), World Bank, 288 2019 Social protection and healthcare programs sometimes target women to increase the impact of such initiatives. However, such targeted measures must Local institutions should also evaluate whether waste man- guard against increasing the responsibilities of women agement programs protect women’s health and wellbeing. and adding to their domestic burden290. Measures that empower women in societies in which women assume domestic responsibilities may include childcare Monitoring and evaluation during work or training hours, education for children, and health care for the family. By strengthening women’s ability Finally, all local and national government policies and pro- to fulfil domestic duties, their capacity is expanded to par- grams should be evaluated for their impact on both men ticipate in financially compensated work. Health safety nets and women so that neither group is discriminated against. would particularly benefit women who are disproportion- Indicators should be developed in the program design ately close to the dirtiest work in informal sectors and thus phase based on local goals. These indicators should high- assume highest health hazards. Further, vocational training light accomplishments or shortfalls in access to economic provides women with security and optionality outside of resources, representation, and economic parity. One exam- the waste sector. Other programs have helped women waste ple of an indicator-driven waste initiative is a German-funded workers become aware of their access to rights and options waste management project in Serbia that created an action for legal recourse against violations and have provided a plan and gender indicators to ensure that municipal waste safe means to exercise their rights289. management practices did not disadvantage women291. Communication Waste decisions rarely lack a gender impact, and the waste The method of communication that local governments use sector presents a wide opportunity for local governments to in the waste industry can either reinforce or challenge build a just society. By taking a gender-sensitive approach gender stereotypes. For examples, governments can use to waste management, local institutions can improve work- words and visuals to dispel the notion that decisionmak- ing conditions for all, and especially for women, promote ers are men and that women are responsible for domes- equal opportunity and status in industry, and ultimately tic waste disposal. Communications can also be used to strengthen the value chain for recyclables while advancing increase social acceptance of women in waste manage- environmental health. Empowerment of all genders in waste ment leadership and reduce stigma for atypical gender management can ultimately serve as a sustainability multi- roles, such as by celebrating local female waste collec- plier for local governments, allowing them to tackle goals tors in media. Given the role of women in socializing chil- on social equality, while making progress toward responsi- dren in environmental education, waste communication ble consumption and building sustainable cities. 289 The Role of Gender in Waste Management: Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam, Ocean Conservancy, 2019 290 Recognizing Gender Issues in the Management of Urban Waste; Water, Engineering and Development Centre (WEDC) and Department for International Development (DFID), UK Department for International Development, 1998 291 Buckingham , Susan, and Michelle Perello, Gender Mainstreaming in Waste Planning, European Union and Urban Waste, 2019 Single-use plastic is a major contributor of pollution in the ocean. It is often found in the stomach of whales, sea turtles, and other marine species.Photo: © Jao Cuyos 7 159 Policy instruments 160 7 Policy instruments 7.1 Instruments to advance the policy waste management in the respective country. A differ- ent mix of policy instruments will be required in different agenda contexts and at different stages in the development of the A careful mix of policy measures and an enabling legisla- waste management system. tive environment are required to ensure effective action at all levels of government to move waste management prac- For the purposes of this document, the key policy mech- tice towards national objectives in a cohesive and coordi- anisms available for supporting the transition to sustain- nated way. able resource management have been considered in terms of the ‘waste hierarchy’. First, policy instruments related The policy instruments applied need to be appropriate to to waste disposal are presented, followed by measures to the context. Experience illustrates that only once the basic support the transition to sustainable resource manage- foundations of a waste management system are in place is ment and moving towards a circular economy. it feasible to fully implement progressive policies to move up the ‘waste hierarchy’ and towards sustainable resource Extended Producer Responsibility, which can be viewed management. To make this possible, it is important that as a cross-cutting policy as it relates to several layers of the market failures associated with poor waste manage- the ‘hierarchy’ (i.e. waste prevention and minimisation, ment are corrected. For example, the environmental cost waste collection and recycling), is discussed separately in of dumping and burning waste is high but the financial Section 7.4. cost to the individual is very low. If uncontrolled dump- ing and burning of waste is not monitored and enforced 7.2 Landfill diversion and landfill with penalties or legal action, there is little incentive for compliance waste generators to dispose of waste in controlled facili- ties. As such, a well-functioning system of waste collection Landfill sits at the base of the ‘waste hierarchy’. However, and controlled disposal needs to be in place as the founda- measures to establish effective landfill management are tion to allow other policies such as landfill tax, extended an essential prerequisite for moving up the ‘hierarchy’. producer responsibility, and product bans and levies to be The need to establish clear and effective standards for implemented successfully. landfill was discussed above. The key policy mechanisms that can be used to support the transition to sustainable Solid waste management contracting and operations can resource management are described below. also provide a useful ‘first mover’ catalyst for improved waste management practices. These actions may include Landfill taxes shifting waste collection vehicles to low-carbon engines Landfill tax is used widely to encourage diversion of waste powered by electricity or hydrogen, using digital tech- from landfill and enable waste management options further nologies like robotics in waste sorting, increasing effi- up the ‘waste hierarchy’ to become more financially viable. ciency with sensor supported containers and collection At its simplest level, landfill tax increases the cost of land- logistic software, and piloting artificial intelligence solu- fill disposal and encourages waste generators and carriers tions, drone based data collection, mobile applications to manage waste through recovery or recycling options. It and others. has been used widely in Europe, for example in Austria, While the previous chapters considered the main legal, Belgium, Denmark, Finland, Germany, Netherlands, Norway, policy, institutional, organizational and financial aspects Sweden and the United Kingdom. However, it can also be of municipal waste management, the purpose of the pres- applied in a more nuanced way to promote landfill compli- ent chapter is to provide international examples of pol- ance. For example, the Slovak Republic managed to close icy instruments for sustainable resource management. its non-compliant landfills and dump sites by imposing a The development of waste management systems is a long progressive landfill tax on them. As the gradually rising tax process and the immediate priorities differ considerably made non-compliant options progressively more expensive, between countries. The policy instruments outlined below investment in new compliant facilities became increasingly are not exhaustive and should be considered as sample more cost effective; the compliant facilities were initially tools and be interpreted within the specific context of free from tax (see Box 26). Bridging the Gap in Solid Waste Management | Governance Requirements for Results 161 Box 26 Slovak landfill strategy development, administrative arrangements and economic instruments292 The aim of the strategy was to replace 5,000 uncontrolled Structure of the Economic Instruments. The aims of the eco- dumpsites on the territory of Slovakia with 100 legally com- nomic instruments were to include an incentive component pliant regional landfills over a ten-year period. The goal was in waste disposal charges; to ensure that they comple- achieved through a programme of measures that included mented market development; to ensure that the relationships strategic planning, administrative decision making and the between all participants in the waste sector were clear; to introduction of innovative economic instruments to support promote diversion of waste from dump sites to new compli- the strategic aims. ant sanitary landfills; and to generate funds to improve the quality of waste management infrastructure and services. The The Waste Act 1991. The responsibility of the waste generator economic instruments allowed initial operation of all licensed for final disposal of waste was strictly defined and enforced. landfills – both compliant and non-compliant – as immediate In the absence of international donor funding, private waste closure of non-compliant landfills was not feasible. management companies were to be primarily responsible for the provision of waste disposal facilities, with government A-rate and B-rate disposal fees were introduced (in addition providing a supportive institutional and legislative frame- to a tariff to cover operational costs). work. Municipal mayors were given legal responsibility for The basic fee (A-rate) was to encourage a municipality to host municipal waste management and authority to enact local a regional sanitary landfill on its territory by guaranteeing a waste management legislation and to set and collect waste minimum level of revenue to its municipal budget. A fee per fees. tonne of waste disposed of to a licensed landfill was collected The National Landfill Strategy 1993. The landfill develop- by the landfill operator; the final beneficiary was the munici- ment programme had three phases: the development of a pality in which the landfill was located. national strategy and a legal basis for waste disposal; the The surcharge (B-rate) fee (or tax) was to discourage disposal closure of unnecessary disposal sites by administrative deci- at licensed landfills that did not meet the technical standards sion; and the introduction of economic instruments to sup- of a new landfill. It balanced the cost of disposal to dumps port the development of legally compliant sanitary landfills. with the cost of disposal to a compliant sanitary landfill, The landfill strategy defined controlled waste disposal as the effectively internalising the environmental impact of non- main disposal practice, the number of landfills appropriate compliant landfills. A fee per tonne of waste was collected for Slovakia, how and where the landfills should be devel- by the landfill operator. The final beneficiary was the State oped and how those goals should be achieved. It provided Environment Fund which used the funds to provide grants to a decision-making process for reducing the number of dump sites; national mapping for decision making on dump site clo- sure and sanitary landfill location; and defined the economic instruments. Administrative arrangements. Disposal of MSW in uncon- trolled dumps was permitted for 5 years following adoption of the Waste Act. Sites were required to obtain a temporary permit from the regional environmental authority and pre- n Surcharge pare an upgrade plan, a step which enabled smaller dumps n Operations costs to be closed immediately. Larger dumps were required to n Basic fee upgrade to new landfill standards or face closure within 5 years (later extended to 7). From an initial 5,000 dumpsites, 4,500 were to be closed by administrative decision and 500 were granted temporary licences. Of these, 400 non-compli- ant landfills were to close by year 2000, leaving a total of Site not complying with Landfill complying with 100 compliant regional landfills (including new sites) across technical requirements technical requirements the country. for landfills for landfills Farkas, J., Transformation of the MSW Sector in Slovakia, (unpublished workshop paper), September 2009 292 162 7 Policy instruments Box 26 Cont. the waste management sector; under certain conditions the stimulating private sector contracts with municipalities for operator could retain B-rate fees to upgrade to the standards both collection and the development of EU-compliant land- of a compliant landfill. fills. It is an example of integrated planning at the national and local government levels, of establishing close linkages Results. The dumpsite closure and regional landfill devel- between administrative decision making and effective eco- opment strategy achieved its objectives and a support- nomic instruments, and of providing a stable and predictable ive environment for private sector investment was created, framework for encouraging private sector participation. The revenues from the landfill tax usually go to the state only feasible once the waste management system has budget or centralized environmental fund from where they shifted up the ‘waste hierarchy’ and there is well-estab- are allocated to support other waste management proj- lished capacity for recycling and treating key materials ects or broader environmental activities. In some cases, such as biowaste, plastics, cardboard and paper. part of the landfill tax is transferred to local authority bud- Bans have been introduced in a variety of different ways gets as an incentive for them to accept regional landfills in a number of countries of the EU (e.g. Austria, Belgium, and large treatment plants on their territory. For example, Denmark, France, Germany, the Netherlands, Sweden, municipalities in Bulgaria are obliged to achieve minimum Norway), in some parts of the USA and in Canadian prov- targets for recycling of municipal waste and for the diver- inces. In contexts where levels of materials recovery are sion of bio-waste from landfilling. Municipalities that fail already high, bans tend to focus upon diverting residual to achieve the targets are obliged to make landfill penalty waste from landfill. In countries where recycling levels deductions for each tonne of waste by which the minimum are still developing, the ban has tended to focus on pre- diversion target is missed. The deductions are deposited venting sorted materials from being landfilled and allow- in a special municipal account and can be drawn upon only ing residual municipal waste to continue to be landfilled. after approval by the Ministry of Environment for activi- For example, in Germany municipal waste that is recover- ties and waste treatment infrastructure that support land- able is banned from landfill which, in effect, means that fill diversion. Municipalities that achieve the targets are residual municipal waste must be treated before land- free of the obligation to make deductions. filling. The ban was introduced in 1993 with a total ban Landfill bans coming into effect in 2005. The quantity of waste land- filled dropped from 39 percent in 1997 to just 1 percent Bans on sending certain materials to landfill are key to by 2005294, supported by substantial investment in treat- ensuring that specific materials chosen for their environ- ment infrastructure, particularly mechanical biological mental impact or potential value are diverted for recovery. treatment to process residual waste. Materials targeted include biodegradable wastes (pri- marily due to the GHG emissions from landfilling), tyres, Bans on landfilling biowaste have also been introduced food waste and all recyclable materials293. The measure in countries where waste composition is characterized by are implemented either as a total (absolute) ban or as a high volumes of organic waste. Many municipalities in the limitation or reduction target. For the bans to work, via- Philippines for example have introduced local ordinances ble treatment options must exist for managing the banned which stipulate that biodegradable waste will not be ser- materials. For example, if biowaste is banned from landfill viced by the public sector. Households are expected to or if the content of the biodegradable fraction is limited, compost biowaste in-situ and only recyclables and resid- sufficient, economically viable capacity must be available ual waste is collected separately by the authorities. A sim- for treating the banned material. An effective enforcement ilar approach has been introduced in states in India. While system is also needed to prevent illegal dumping or dis- this approach reduces the volumes of waste handled by posal of banned materials. These measures are typically the public sector and eases the burden on the system, it 293 The provided examples relate to materials where no technical limitations for depositing in landfills exist. The landfilling of certain waste categories like infectious healthcare waste, liquid waste, flammable waste, certain categories of hazardous waste should be completely prohibited. 294 Landfill bans and restrictions Germany, United Kingdom Department of Food, Environment and Rural Affairs, 2009 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 163 may be difficult to implement in congested urban areas waste management while planning the identification and where households do not have space to handle their organ- technical assessments necessary for developing long term ics. Rural areas on the other hand may benefit significantly regional waste disposal facilities. from such an approach. When implementing programs and measures for cleaning Inventories of landfills and dump sites up dump sites, collection services must be in place to pre- vent reoccurrence of new polluted areas and to monitor Many countries in the initial phase of developing waste against pop-up of new dumpsites. management systems are confronted by large numbers of uncontrolled landfills and dump sites. The usual approach Reducing finance available for landfill for dealing with this problem is to prepare a detailed land- Investment finance can be used for landfill development fill inventory, followed by environmental risk assessments as a policy instrument for reducing reliance on landfill. being undertaken for all identified sites. The inventories Countries with only limited engineered landfill capacity allow measures for dump site closure to be concentrated and where uncontrolled dumping is widespread require initially on those which pose the highest environmental substantial sources of finance to support the development risks and for subsequent closure and rehabilitation expen- of additional landfill capacity. Often this finance is pro- ditures to be distributed realistically over time. Improving vided by central government, IFIs or specially developed landfill standards is an investment heavy process which finance vehicles. Once sufficient landfill capacity has been experience shows can take a decade or more to implement developed, however, these sources of finance can be con- fully. Some countries have introduced transitional mea- strained as a matter of official policy, by making the lend- sures for phasing in compliance with national landfill stan- ing terms less attractive for example, in order to make it dards over a statutory timeframe. These usually include more difficult to develop landfill capacity. Provided that acceptance of intermediate standards which allow cer- funding sources remain available for non-landfill invest- tain non-compliant landfills to operate for a limited period ments, this can serve to make it more favourable to invest under less strict requirements. in treatment technologies that divert waste from landfill. For instance, the State of Kerala in India initiated a pro- For example, Bosnia and Herzegovina has been identified cess to create an inventory of legacy dumps. It started as a potential candidate for EU membership and receives with identification of 37 medium to large sized dumpsites financial assistance to increase its compliance with EU (ranging from 2 to 10 acres of land with height of the waste environmental (among others) requirements. The county body between 2-8 meters). The total legacy waste accu- was eligible to receive EU funding to develop landfill mulated at the dumpsites is estimated at close to 1 mil- capacity in the past but future investments may be con- lion m3 of waste as indicated by Kerala Pollution Control strained in view of EU policies to minimize landfilling to Board295. Eighteen of the identified dumpsites have an 10 percent or less of municipal waste by 2030296. area greater than 10,000 sq.m. and have been prioritized for initial technical and safeguard screening assessments 7.3 Recycling and recovery that would inform the potential for reclamation and/or uti- lization as part of future waste infrastructure. The initial Recycling and recovery targets technical and safeguard screening assessments included Implementing targets for improving recycling performance a comprehensive checklist of risks, including loca- can serve as a key driver for promoting improvements in tional, environmental, flooding, connectivity, access, etc. waste management. For this to be effective, penalties Depending on the results of the technical investigations are needed for failure to meet the targets. The mere exis- and field surveys, the dumpsites may be permanently tence of a target does not of itself drive improvements in closed or used for interim regional disposal facilities and performance. other waste processing facilities to optimize the utiliza- tion of available land. The interim regional disposal facil- Targets for recycling have been used to good effect in ities are seen as an important element of an incremental Europe and are considered to have played a key role in approach that would enable concurrent improvements in helping governments raise their recycling rates. In the EU, 295 Location of Dumpsites-Landfills in Kerala, Kerala Pollution Control Board, 2019, available at http://www.indiaenvironmentportal.org.in/files/file/ dumpsites-Kerala-report-NGT.pdf 296 Revised EU targets available at https://ec.europa.eu/environment/waste/target_review.htm 164 7 Policy instruments these targets were set by the Waste Framework Directive and contaminated materials (e.g. containing food waste and applied to the national recycling performance of each and oils) are costly to separate and process into high qual- EU member state. In this sense, the national targets pro- ity recyclate. The options for recycling such materials are vided an incentive for member states to increase their limited, and tend to be open-loop or downcycling, which recycling performance; member states which failed to typically results in the realisation of far lower net environ- meet the targets were penalised - a process which began mental benefits than when compared to closed-loop recy- with a warning from the European Commission and later cling (i.e. recycling waste products into products similar escalated into fines being imposed on the member state. to the original). Closed loop recycling, however, entails high standards and strict quality control over material These national targets are often delegated to the state or purity to meet manufacturers requirements. local authority level, acting as incentives for local action on increasing the collection of recycled materials from By setting clear standards for the suppliers and manufac- municipal waste. For example, in 2010 the Welsh govern- turers using recycled materials, voluntary or mandatory ment in the United Kingdom set statutory recycling targets standards can help address these issues and help markets of 70 percent by 2025 for its 22 local authorities297. Ten operate more effectively. Standards bring consistency, years from the announcement of the target, Wales’ national create confidence in supply and help develop markets for municipal waste recycling performance was 61 percent, recycled materials. Standards are needed to support many amongst the highest in the world. Targets have played a of the policies discussed in this chapter. key role in achieving high recycling rates, together with Typically, standards for recycled materials are established accompanying measures that include central government by national technical centres, international standards financial support of over £1 billion since 2000 for local bodies or trade associations with an interest in support- authorities to invest in collection services for recyclable ing a particular recycling sector. For instance, standards materials. The government also established a ‘Collections for processing biowaste are relatively well-established in Blueprint’298, setting out the recommended method of a variety of countries. These standards help ensure that waste and recycling collection to ensure the provision of compost and fertilisers produced by plants treating bio- consistent and high-quality services. This included intro- waste, particularly from municipal sources, are safe to use ducing separate weekly food waste collections, reducing and of a specified quality. These standards help to pro- the frequency of residual waste collections, and expand- vide confidence in the product and create a market for ing the range of materials collected (e.g. electronics and the materials. For example, in Germany an industry asso- batteries). These efforts were supported by a national ciation, the Bundesgütegemeinschaft Kompost e.V., has communications campaign. established standards for compost and digestate products Using targets in this way is a supply-side measure. It produced by composting and anaerobic digestion plant encourages the collection of materials for recycling but (RAL-GZ 251, 245 and 246)299. These are recognised by the does not necessarily create the demand for those mate- public authorities and provide confidence in biowaste-de- rials. Within the EU, the quantity of materials collected rived outputs produced by the composting and anaerobic for recycling has increased considerably over the past digestion industries. decade. However, development of the capacity needed for The development of standards for recycled materials is reprocessing this material has emerged more slowly, with an on-going process, as technologies, materials and the much of the collected material being exported from the EU associated environmental benefits and impacts from their to be recycled elsewhere. use and recovery change. For example, the development Standards for recycled materials of standards for plastics is growing rapidly in associa- tion with efforts to expand plastics recycling and tackle Standards for recycled materials are important for creating plastic pollution. Standards recently released on biode- confidence in the supply chain. Recycling has the greatest gradable plastics include the International Standards economic and environmental benefit when it focuses on Organisation’s ISO 22403:2020 related to the biodegrad- high quality recycled materials. Mixed waste materials ability of plastics300. 297 Towards Zero Waste, Welsh Assembly Government, 2010 298 See https://collectionsblueprint.wales/ 299 See https://www.kompost.de/guetesicherung/guetesicherung-kompost 300 Plastics — Assessment of the intrinsic biodegradability of materials exposed to marine inocula under mesophilic aerobic laboratory conditions — Test methods and requirements, available at https://www.iso.org/standard/73121.html Bridging the Gap in Solid Waste Management | Governance Requirements for Results 165 Standards also have a role to play further up the value chain, 7.4 Extended producer responsibility at the design and consumption stage of materials. For exam- ple, standards need to be set for manufacturers to provide a The use of Extended Producer Responsibility (EPR) consistent basis for claims made in terms of the recyclabil- schemes to address the management of specific waste ity of consumer products. The United Kingdom’s On-Pack streams, such as packaging wastes, end-of-life vehicles, Recycling Label (OPRL) is an example of a simple and con- eWaste, batteries and used tires is now widespread and sistent United Kingdom-wide recycling label on retail and its application has also been considered recently across brand packaging that aims to help consumers make informed a broader scope of product categories, including textiles, purchasing choices and recycle products correctly. By estab- diapers and tobacco products (see Figure 10). In essence, lishing a clear definition of the term ‘recyclable’ the scheme EPR places the responsibility for the management of a provides consistency and market confidence301. product once it becomes waste on to the producer. The OECD provides a definition of EPR303: ‘Design for recycling’ requirements ‘Extended Producer Responsibility (EPR) is a pol- A key barrier to recycling is that products are rarely designed icy approach under which producers are given a with consideration being given to their end-of-life destiny. significant responsibility – financial and/or physi- Many products and materials are technically or financially cal – for the treatment or disposal of post-consumer difficult to recycle because they cannot be separated, are products. Assigning such responsibility could in contaminated with non-recyclable materials or are com- principle provide incentives to prevent wastes at ingled with materials that also cannot be easily recycled. the source, promote product design for the environ- Working with product designers, manufacturers and brands ment and support the achievement of public recy- can help address these issues by encouraging designs that cling and materials management goals.’ make products easier to recycle. For example, the change of a label on a plastic bottle from PVC (which is potentially harmful if heated and thus makes recycling challenging) to Figure 10 Extended Producer Responsibility as part of polypropylene (a material that can be easily separated and Circular Economy recycled) is a simple way in which product design can sup- port recycling. The European PET Bottle Platform302 is an Materials example of an industry-led initiative that has played a key Manufacturer role in ensuring that bottles are designed with end-of-life Reuse/ Producer of management as an objective. The Platform provides guid- Recycling product ance and resources to support product designers in design- ing products that satisfy this objective. Waste Distributer Taxes related to recycling content collection Taxes and levies linked to minimum recycled content poli- Waste cies are a tool for supporting the development of recycling generation Consumer markets. For example, in the United Kingdom it is intended that any plastic packaging product containing less than 30 percent by mass of recycled content will be subject to a Source: Circular Economy. Roles and Responsibilities for involved stakeholders. An initial proposal from the point of view of a Producer new plastics tax. Draft legislation is due to be presented Responsibility Organization. European Recycling Platform for public consultation in early 2021. A similar legislative instrument is to be introduced across the EU as part of the Single Use Plastics Directive. These types of instrument According to the OECD, and as presented below, four broad provide incentives for the use of recycled content and for categories of EPR instruments are at the disposal of policy driving the demand for recycled plastic material. Under makers. These typically address specific aspects of waste current proposals in the United Kingdom, the tax rate is management, and can be implemented concurrently: expected to be set at £200 per tonne for any packaging materials with less than 30 percent recycled content. 301 On Pack Recycling Label, available at https://www.oprl.org.uk/ 302 See https://www.epbp.org/ 303 Extended Producer Responsibility: Updated Guidance for Efficient Waste Management, OECD Publishing, 2016 166 7 Policy instruments ❚ Product take-back requirements. Take-back policies by incineration. The fee can, in theory, create incentives require the producer or retailer to collect the product at for changes across the value chain, including changes the post-consumer stage. This objective can be achieved to business models and product designs. The fee can through recycling and collection targets set for the prod- also be calculated to cover the costs of the economic uct or materials and through incentives which encour- damage associated with the waste product, including the clean-up costs of marine litter or estimated damage age consumers to bring used products back to the selling costs to the environment. point.304 In a takeback scheme, consumers return their end-of-life products to their manufacturer, supplier or In the DRS a deposit is paid on purchase of a product retailer. The takeback organisation is then responsible for and is repaid on return of the end-of-life waste prod- waste management. This connects the value chain to the uct to an authorised collection point. The deposit is an incentive for the consumer to return the waste product. end-of-life costs associated with the product and, in the- The system is used to increase recycling rates and to ory, creates incentives for participants in the value chain tackle products that are often found littered or illegally to minimise these costs by making changes to business dumped. The deposit needs to be transparent and of suf- model and product design. The takeback service is usu- ficient value to motivate the consumer to return the item ally offered at no charge to the consumer at the point of and not treat it as a sunk cost. return, although the cost is typically covered in the prod- Regulations and performance standards such as minimum uct price and is thus paid indirectly in advance. Reducing recycled content. Standards can be mandatory or applied by the costs of waste management can therefore provide a industries themselves through voluntary programmes.306 competitive advantage to the manufacturer. As the con- sumer has access to ‘free’ waste management it removes ❚ Accompanying information-based instruments. These pol- the incentive to stockpile or illegally dump the waste to icies aim to indirectly support EPR programmes by rais- avoid having to pay for waste management. ing public awareness. Measures can include imposing information requirements on producers such as report- ❚ Economic and market-based instruments. These include ing requirements, labelling of products and components, measures such as deposit-refund schemes, Advanced communicating with consumers about producer respon- Disposal Fees (ADF), material taxes, and upstream com- sibility and waste separation, and informing recyclers bination tax/subsidy (UCTS) schemes that give the pro- about the materials used in products.307 ducer incentives to comply with EPR305. The mix of policy instruments applied varies between ADF is paid by the consumer at the point of sale. The the different countries and product categories. The EPR disposal fee is usually passed directly to a third party, instruments can also be combined or applied in parallel typically the competent government agency or an autho- with other policy tools, such as pay-as-you-throw charging rised body responsible for administering the EPR sys- schemes for municipal waste services, landfill taxes, etc. tem and ensuring that there are sufficient funds to cover the costs of managing the end-of-life waste product. The EPR can contribute to the achievement of a of range waste consumer is given access to ‘free’ waste management, management objectives: as an incentive for producers to having paid for it in advance. The mechanism is used to minimise waste and to design products which are simple overcome economic barriers to waste collection, recy- to dismantle, re-use and recycle; to maximise the collec- cling and reuse, especially where these activities are tion of specific waste categories; to increase the amount deemed to be too expensive to be left to market forces. of waste that is re-used and recycled; to support the devel- opment of recycling markets, and/or to fund waste man- The fees paid by the producers for waste management agement. The EPR also supports the promotion of more and end-of-life impacts can be modulated in ways that sustainable consumption models through education ini- provide incentives for achieving specific outcomes. For tiatives and awareness raising programmes in support of example, producers may pay a far lower fee when prod- waste prevention and separation at source. Last but not ucts are recycled than when disposed of to landfill or least, EPR is a tool for shifting responsibility away from 304 Ibid 305 Ibid 306 Ibid 307 Ibid Bridging the Gap in Solid Waste Management | Governance Requirements for Results 167 local authorities to the producers and consumers of prod- organisational innovation, the diversification of mate- ucts and in this way to reduce public spending on waste rial supply sources contributing to heightened resource management (see Box 27 with an example from Chile). security, and improvements in the organisation of supply In addition, EPR is believed to generate a range of broader chains resulting from the emergence of more international economic benefits, including expanded technological and operators in the recycling sector308. Box 27 EPR system in Chile goals and obligations for household and industrial packaging waste. On average, the goals announced will allow Chile to The Law of Waste Management, Extended Producer move from 5 percent of household packaging recycling to 60 Responsibility and Recycling Incentives (Ley N°20.920/2016, percent in twelve years. The decree establishes specific goals Ministry of Environment)309, generally called ‘EPR law’, sets for each material in twelve years: beverage cartons (60 per- the framework for EPR schemes for six priority product cat- cent), metal (55 percent), paper and cardboard (70 percent), egories. Almost a decade after studies were first carried out plastics (45 percent) and glass (65 percent). While for indus- in 2007, the EPR law began to be implemented as the spe- trial waste, the obligations will be metal (70 percent), paper cific details, associated obligations and goals (collection and and cardboard (85 percent) and plastics (55 percent). recovery rates) were defined and published in ordinances for each priority product: The collection goals are identical to the recovery goals and should be met over the same time frame. But kerbside collec- ❚ Tires: Ordinance (DS N°8/2019, Ministry of Environment, tion must also be expanded from 10 percent to 85 percent of re-entry 12/2020310) in final phase of inspection at inhabitants covered. Comptroller General of the Republic. ❚ Packaging: Ordinance (DS N°12/2020, Ministry of The collective PROs must conduct open tenders to con- Environment, 06/2020311) in final phase of inspection at tract waste management services separately for collection, Comptroller General of the Republic. pre-treatment (such as classification) and treatment (such as ❚ Lubricant oils: The draft ordinance in public consultation recycling). Municipalities and informal waste pickers have until 1/19/2021.312,313 certain preferences. ❚ Portable batteries: The development process of the regula- Two packaging PROs are currently in the process of being tion will start soon. founded: One, initiated by the Food and Beverage Association ❚ Automotive batteries: Process still pending. ‘AB Chile’, covers both domestic and industrial / commercial ❚ Electrical and electronic equipment waste (WEEE): Process packaging waste. The other, focussing solely on industrial / still pending. commercial waste, is being constituted by a non-profit union According to the EPR law, the producers are responsible for federation of companies and unions from the Chilean indus- the organisation and financing of waste management of prior- trial sector (SOFOFA), together with Rigk Chile (German PRO) ity products that they market in the country. The obligations and Valipac (Belgian PRO). established within the EPR framework must be fulfilled through The collective PROs for packaging must lodge monetary an individual or collective producer responsibility organization guarantees to ensure compliance with the goals and asso- (PRO), which will be responsible to the authority. The collec- ciated obligations which will become effective in the event tive PROs cannot distribute profits among their associates. of non-compliance. The amount of the charge will be equiva- Packaging314. In the case of packaging, there are different lent to the cost of managing waste that was not collected or 308 Ibid 309 See https://www.leychile.cl/Navegar?idNorma=1090894 310 See https://rechile.mma.gob.cl/wp-content/uploads/2020/12/DS-08-Reingreso-2020-12-14.pdf 311 See https://rechile.mma.gob.cl/wp-content/uploads/2020/07/DS-12_08_06_2020-Propuesta-DS-REP-envases.pdf 312 See https://consultasciudadanas.mma.gob.cl/storage/consultation/Dvn3t4HsAFIDevlC5NWBzAvvTGafFpYtEfAA7Uvn.pdf 313 See https://rechile.mma.gob.cl/wp-content/uploads/2020/12/28-Resolucion-aprueba-anteproyecto.pdf 314 See https://rechile.mma.gob.cl/wp-content/uploads/2020/07/DS-12_08_06_2020-Propuesta-DS-REP-envases.pdf 168 7 Policy instruments recycled during the year. The amount of the guarantee could to or provide for the achievement of recycling and recov- however be lowered by a ‘default risk factor’. ery targets as defined in national legislation. An example of recycling targets for packaging waste in EU countries is Packaging waste is used below as an example to demon- provided in Table 12. strate the main elements of the EPR system. The producers or the importers of the packaged goods The major role of the EPR system is to provide an addi- usually have the option of fulfilling their packaging obli- tional financial stream in support of packaging waste recy- gations in one of two ways: i) individually, through the cling and recovery. It can also bring valuable knowledge establishment of take back or deposit systems for used on how recyclable material collection and sorting can be packaging in the place of sale of the respective products or organized and provide guarantees that the materials col- ii) collectively, by transferring their obligation for achiev- lected will be recycled. As EPR schemes are organized by ing the recycling and recovery targets to a collective com- the private sector they are typically more flexible and effi- pliance organization approved by authorities. cient than state institutions are in organizing waste man- agement services. Producer Responsibility Organization The provisions for EPR must be established in the rele- The Producer Responsibility Organisation (PRO) is the vant national waste management legislation defining the main entity through which the EPR system is implemented. scope of requirements concerning the different products The PRO is a collective compliance scheme established on categories and the waste fractions arising from their con- behalf of an industry, responsible for organizing separate sumption; specific separate collection, preparation for collection and achieving recycling and recovery targets on re-use, recycling and recovery objectives and targets to be behalf of the producers and importers of packed goods on achieved; responsibilities of various stakeholders; report- national market. ing requirements; and mechanisms for monitoring and A PRO can assist in managing obligations, administration control. and fees for producers. This reduces the burden on indi- Taking EPR for packaging waste as an example, every pro- vidual producers which also benefit from the economies of ducer or importer whose products are sold in packaging scale realised by the PRO in working for many producers on a respective national market is required to contribute in a single scheme. Table 12 Evolution of EU recycling targets for packaging waste Material 2001315 2008316 2025317 2030318 Recycling (all packaging) 25% (max 45%) 55% (max 80%) 65% 70% Paper and cardboard 15% 60% 75% 85% Glass 15% 60% 70% 75% Plastic 15% 22.5% 50% 55% PET bottles – – 77% 319 90%320 Ferrous metals 15% 50% 70% 80% Aluminum 50% 60% Wood 15% 25% 30% 315 Directive 94/62/EC of the European Parliament and of the Council of 20 December 1994 on packaging and packaging waste 316 Directive 2004/12/EC of the European Parliament and of the Council of 11 February 2004 amending Directive 94/62/EC on packaging and packaging waste 317 Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 amending Directive 94/62/EC on packaging and packaging waste 318 Ibid 319 Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment. The target refers to separate collection for recycling of the amount of waste single-use plastic products. 320 Ibid. The target applies as from 2029. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 169 Generally, PROs exercise the following functions321: ❚ Report to the national/entity authorities ❚ Organise, often in combination with the local authori- In the implementation of these duties the PRO interacts ties, the take back of post-consumer products with various stakeholders, such as producers and import- ers of packed goods, state and local authorities, waste ❚ Ensure compliance with recovery and recycling targets management companies, recycling plants and citizens ❚ Assist companies in (packaging) waste prevention, using the separate waste collection services. The key rela- eco-design, promotion and communication towards the tions of PRO with the different stakeholders are presented waste holder, together with the local authorities on the following Figure 11. ❚ Verify the data and reporting requirements of the partic- ipating companies Figure 11 Producer Responsibility Organization interaction with other stakeholders Clients National Authoritites (Producers and importers of packed goods) Defining legislation and policy. Transfer of obligations and financing. Permitting and control of PRO activities. Reporting of quantities placed on market. PRO Citizens Local Authoritites Planning, organization, contracting, and Participation in separate collection Organization of separate waste collection. financing. systems. Reporting to state authorities. Public awareness. Waste Management Companies Recycling Companies Operate separate collection Guarantee the recycling of collected and sorting. and sorted materials Financial vs organizational responsibility of PRO In case that PRO has the full financial and organizational responsibility the usual practice is the separate waste col- The municipal administrations are formally responsible lection and sorting to be implemented based on contracts for organizing the separate collection of recyclable waste with specialized waste management companies. The legis- from the households on their territory. lation in many countries requires such service contracts to The decision on the allocation of responsibilities between be concluded based on tender procedure. The PRO should the PRO and the local authorities for organizing the sep- also provide for initial investments in separate collec- arate collection and sorting of packaging waste from tion containers (when relevant) The separate collection households is fundamental to the functioning of the entire containers, if required could be financed and owned by system. The PRO role can be limited to a solely financial the PRO or by the collection services provider. In limited responsibility or, alternatively, the obligated industry can number of cases the PRO could also invest in the special- take full responsibility for financing, organizing and imple- ized collection and sorting equipment and then rent it to menting the separate collection and sorting services itself. the service operators. In case of full organizational and 321 Extended Producer Responsibility at a glance, EXPRA, 2016 170 7 Policy instruments financial responsibility of the PRO, there are no financial system established, and offer uniform cost sharing and transfers to local authorities and to a large extend the sep- payment conditions to all municipalities within a specific arate waste collection and sorting of packaging waste is group. functioning like parallel system to waste management ser- Another issue that arises when applying the shared vices organized by the municipalities. responsibility model is that the costs of implementing a In covering the full cost the PRO must take the following separate collection system, the revenues from the sale of into account: recyclable materials, and the treatment and disposal costs related to specific recyclable commodities change over ❚ Other non-packaging materials put into the separate col- time. Appropriate price adjustment mechanisms must be lection containers which separate collection and sorting agreed between the PRO and the municipalities in order to systems organized by the PRO also deal with (mainly guarantee the long-term financial and operational viabil- printing paper and newspapers). ity of the system. ❚ A significant quantity of impurities placed in the sep- Household vs commercial packaging collection arate collection containers that cannot be recycled The scope of collection systems in some countries is lim- (residual waste). ited to household packaging whereas in others it covers all This leads to additional collection and sorting costs for the packaging materials. Where collection systems are estab- PROs. lished for both household and commercial packaging the legislation can require a separation of the cost structures These additional costs incurred by the PRO are usually bal- between the two components (e.g., Austria). In Belgium, anced by municipalities through not charging fees for the household and commercial separate collection packaging sorting residues delivered on behalf of PRO at the munici- services are provided by two separate PROs. pal waste landfills or treatment plants, providing support in the enforcement of requirements for separate collection Setting specific objectives that are in addition to existing and actively participating in public awareness campaigns recycling and recovery targets can provide clear indicators implemented on their territory. of the results expected from the EPR system. As an exam- ple, such objectives can include: In case the PRO has only financial responsibilities the sep- arate collection and sorting are organized directly by the ❚ Minimum number of residents provided with separate municipalities in a similar way like other waste manage- collection services as a percentage of total number of ment services and in this way, responsibilities are shared residents. between the obliged industry and local authorities. In case of shared responsibility model, the PRO is covering partly ❚ Container type and minimum container volume provided of fully the costs of municipalities related to management of per capita served or maximum number of residents packaging waste on their territory. The practice is the costs served by one set of separate collection containers of municipalities to be reimbursed in the form of payments ❚ Collection frequency (or volume collected per capita) per tonne for the different separately collected and sorted/ recycled packaging waste materials. Under shared respon- ❚ Obligatory door-to-door separate collection systems sibility model, the municipalities are responsible to cover implemented in all areas where individual bins are used the costs of non-packaging recyclable materials collected for collection of residual waste through the separate waste collection system. ❚ All separately collected waste to be delivered to a spe- Note also that the PRO will apply standard and unified cialized sorting facility requirements for all municipalities as implementing spe- cific conditions in individual municipalities is difficult. The objectives should be based on clear technical require- In practice this means that all municipalities will receive ments for the separate collection and sorting systems. from the PRO the same payment per tonne of packag- Territorial coverage ing waste collected, sorted and delivered for recycling. A fairer solution would be to allocate municipalities to An important consideration is whether separate collec- groups according to specific characteristics, such as pop- tion should be organized throughout the entire national ulation size and density and type of separate collection territory or focused only on those areas where an efficient Bridging the Gap in Solid Waste Management | Governance Requirements for Results 171 collection process can be organized. In countries where drawing on their market experience, and protecting and the collection of municipal waste generally remains poorly extending their range of services. developed, especially in rural areas, it is may be unreal- Given the significant amounts of commercial packaging istic (or even counter-productive) to introduce separate generated and collected in the retail sector, retail chains collection schemes until basic collection and disposal may also be interested in setting up their own compliance schemes are fully operational. schemes. The following possibilities should be considered: A non-for-profit requirement is another factor that can ❚ Organizing separate collection systems across the entire limit the potential shareholders in a PRO. national territory In some countries the national legislation prescribes lim- ❚ Setting objectives for the minimum number of residents itations on the possible shareholders, ownership of PRO and the principles of its operations. These could include: served as a percentage of total number of residents ❚ Obligatory ownership of a PRO by obligated industries ❚ Setting a threshold number of residents living in indi- vidual settlements above which separate waste collec- ❚ Physical persons are barred from becoming shareholders tion services are obligatory ❚ A single company or group of companies may not own Competitive or monopoly market more than a specified percentage of shares in a PRO Most countries have not granted exclusive or special rights (usually between 10 percent and 30 percent) to companies operating collective systems. Their laws do ❚ Requirement for the organisation to be operated on a not prohibit the creation of alternative systems. not-for-profit basis For example, in some EU countries one cross-material sys- Equal treatment of clients tem predominates (e.g., ARA in Austria, Eco Emballages in France, Fost Plus in Belgium, EKOKOM in Czech Republic). The principle for the equal treatment of clients applies as In other countries alternative cross-sectoral and cross-ma- a rule for the operation of a PRO. terial systems exist. Nevertheless, some PROs operating in competitive mar- EPR systems that allow more than one PRO depend on a kets offer special conditions as an inducement to attract framework of clear rules and procedures that ensure a new clients or to protect existing ones. Such preferential fair allocation of tasks between market participants. The conditions can be lower prices, discounts on official prices achievement of recycling and recovery targets cannot be or additional free-of-charge services. The special condi- the only criteria on which to base the formation of a PRO. tions are usually offered to large companies which make significant financial contributions to the system. Two main approaches are possible: In order to avoid market distortions the enabling legisla- ❚ To set up a special entity (clearing house) charged with tion must ensure equal treatment of all clients. allocating and verifying the implementation of tasks Financing of EPR system allocated to individual operators, including the alloca- tion of financial responsibilities The major sources of finance for EPR schemes are licensing fees charged by the PRO to the producers and importers of ❚ To define precisely in the relevant legislation the proce- packed goods and the revenues from the sale of recycla- dures for allocating responsibilities between PROs. This ble materials. Revenues generated in this way are used to approach is typically based on dividing the service terri- cover the end-of-life management costs of the respective tory proportionally to the market share of PROs. products or packaging. These relate to separate collection and sorting and, in some cases, treatment and recycling, Ownership of the PRO public awareness raising and administration. The range The PRO is usually owned by the obligated companies. of costs covered and the fees charged differ considerably between the various systems. Waste management companies and private entrepreneurs are likely to be interested in setting up PRO schemes, The majority of PROs that deal with packaging waste 172 7 Policy instruments charge users fees based on the quantity of material col- To the extent possible, the EPR system should build on the lected. Different systems use different fee structures. For existing recyclables collection/sorting activities, includ- example, they may charge a uniform fee per unit of any ing and involving the informal/semi-formal sector. category of plastic or they may charge differentiated fees Permitting, reporting and control for PET bottles, other plastic containers or foils. Some set different fees for household (sales) packaging and for The national legislation should provide for transparency commercial/industrial (group, transport) packaging. In a of the EPR system. similar way, differentiated fees can be applied depend- PRO operations are usually subject to obtaining a permit ing on packaging size or volume. There is some practice or license issued by the competent national authorities also of PROs charge additional or minimum fees per unit based on a plan or programme of operations. The obli- of packaging. gated companies and PROs are also obliged to report on Technical aspects the quantities of packaging placed on the market and on the collection, re-use, recycling and recovery of packaging Two main types of system for the separate collection of waste. These reports can be subject to independent audit. recyclables and packaging waste can be identified and implemented through various types of collection equip- EPR systems established for packaging waste have proved ment: door-to-door collection systems and bring systems. their effectiveness in many countries. Nevertheless, there The different types of system are associated with the dif- is no ‘best’ solution that can be directly transferred to ferent quality of the recyclable materials collected and other countries. The various EPR systems that are used with different costs. For example, the types and sizes of internationally differ significantly from each other and the separate waste collection containers used affect the have gradually evolved and adapted to meet the needs of quantity, composition (quality), volume, weight and unit the individual countries. The design of the EPR system is size of waste collected. Although the decision whether likely to be unique to the specific conditions of the place to implement drop-off or kerb-side collection schemes where it is to be implemented: the geography, the level of depends mainly on the collection rates to be achieved, economic development and household incomes, the legal it is also linked with how the residual waste collection system, the current scope of waste management services, service is organised, the tariff system in place, people’s people’s attitudes and behaviour patterns, the existence behaviour, scavengers and many other factors. and stage of recyclable material markets, and more. Establishing minimum technical standards to be met by EPR implemented on voluntary basis separate collection and sorting systems for packaging Not all EPR schemes are mandated by legislation. There waste allows for better planning of implementation costs by are several examples of EPR schemes being developed and PROs and municipalities. Such technical standards must be implemented on a voluntary basis by producers (see Box agreed between the PROs, municipalities and the competent 28 with an example from South Africa). This is normally a national authorities. The requirements can be established response to public pressure to address waste and pollu- in the respective packaging waste regulations, introduced tion issues associated with specific types of product, such as a separate guidance document or included into the plans as single use packaging. A key risk associated with volun- submitted by PROs with the permit application. tary schemes is the free-rider problem: producers who do It is wise to conduct a set of pilot projects before launch- not participate in the scheme but who can unfairly bene- ing full scale operations to evaluate different collection fit from it by having their products collected for recycling methods. The existence of informal sector activities means without contributing towards its costs. As such, voluntary that the effectiveness of collection systems based on sepa- schemes tend to be successful only where a small number rate collection containers or plastic bags must be initially of major producers control a large share of the market, or tested prior to their eventual implementation at national where a proactive trade association coordinates its mem- level. The technical solution selected for implementing the bers in support of a scheme. separate collection and sorting system has direct influ- ence on the amounts and quality of the materials collected and their related costs. Bridging the Gap in Solid Waste Management | Governance Requirements for Results 173 Box 28 Voluntary EPR in South Africa South Africa is well known for its successful industry-led EPR bottles purchased from converters); resin producers and schemes, with one of the earliest, Collect-a-Can, being estab- brand owners pay annual grants. PETCO is also involved in lished in 1993322. Several different EPR schemes exist for activities to increase demand for recycled PET, as well as in different waste streams, leading to an increase in separate awareness-raising and educational activities for consumers. collections and recycling rates for the materials covered. At Through these efforts, PET recycling grew from 2 percent in the core of each scheme is the establishment of a PRO to coor- 2000 to 62 percent in 2019323. dinate the industry’s EPR activities and ensure that responsi- Another PRO in South Africa, POLYCO, the Polyolefin bilities are met. Responsibility Organisation, collects voluntary EPR fees from One example of a PRO is the PET Recycling Company (PETCO). 11 packaging converter members. These fees are used to It is a non-profit, joint industry initiative which acts as the fund support for collection and recycling companies through vehicle through which the PET industry self-regulates and grants or interest-free loans. One such programme is Packa- coordinates its recycling activities. PETCO is funded by lev- Ching, a scheme for increasing recycling in informal settle- ies paid by PET converters (on resin purchased from PET ments and low-income areas in South Africa. resin manufacturers) and importers as well as bottlers (on 322 A Nahman, Extended producer responsibility for packaging waste in South Africa: Current approaches and lessons learned. Resources, Conservation and Recycling, 2010 323 See https://recyclinginternational.com/business/high-hopes-for-pet-recycling-in-south-africa-despite-lost-capacity/31076/#:~:text=In%20 2019%2C%20no%20less%20than,non%2Dprofit%20producer%20responsibility%20organisation. 7.4.1 Public fund managed schemes for The main arguments for implementing public fund man- packaging waste aged scheme are to guarantee sufficient revenues for the system through product taxes imposed on packag- The EPR schemes for packaging waste are in principle ing. Public funds also have less complicated institutional organized by the obliged industries and involve packaging arrangements in comparison with other privately orga- producers and companies that place packed goods on the nized EPR models (e.g. no need for establishment and market. In a limited number of cases, the management of licensing of PRO and control of its activities) as well as packaging waste is organized by the state based on prod- direct state control over financing and implementation. uct taxes for packaging placed on the market that is paid The public fund managed scheme can help to guarantee to state budget, such as in Hungary324, a state environmen- the development of public separate collection and sorting tal fund, such as in Croatia325, and specially designated infrastructure and speed up investments in the sector. enterprise, such as in Belarus. The mains issues associated with public fund management The revenues from product taxes collected in the respec- schemes are that the size of the product taxes for differ- tive public fund or enterprise are used to develop the nec- ent packaging materials may not cover the actual costs for essary separate collection and sorting infrastructure for separate collection, sorting and treatment, governments packaging waste and finance the implementation costs. may spend the collected revenues for purposes other than Under the public fund managed scheme, local authorities separate collection and sorting, or revenues may be uti- are responsible for organizing the separate collection of lized less efficiently than privately managed EPR schemes. waste from households and the related costs are fully or The achievement of recycling and recovery targets is not partly covered by the public fund. guaranteed as the government or public fund cannot be held responsible. 324 According to the legal requirements in Hungary all companies are obliged to pay an environmental tax to the National Tax and Customs Administration. The object of the charge is the packaging material instead of the packaging and therefore packers are directly not subject of the law for domestic products. In case of products produced abroad the importer company is responsible for the charge, i.e. the company who imports, and sells the product in Hungary at the first time, or uses it for their own purposes. 325 Environmental Protection and Energy Efficiency Fund (EPEEF). 174 7 Policy instruments The public fund managed scheme assumes that the major- consumers to repair their products. For example, as part ity of the funds will be channelled through local authorities. of the EU’s Circular Economy Action Plan, the European Considering that local authorities often have difficulties in Commission announced in March 2020 that manufacturers organizing collection, treatment and disposal of (residual) of phones, tablets and laptops will face legal obligations to municipal waste, they may also encounter difficulties in make their products easier to repair and reuse, under a new separate waste collection, sorting of recyclables, and nav- recycling plan for the EU. Termed as ‘the right to repair’, the igating the market for recycling waste. European commission will extend an eco-design law, which previously set energy efficiency standards, to also cover 7.5 Reuse and repair technical standards so that these goods will be made using changeable and repairable parts. The right to repair goes Reuse and repair are options that sit near the top of the against the linear growth model of ‘take, make, use, dis- ‘waste hierarchy’ and form a fundamental component of card’, embedding repair and reuse at an institutional level circular economy approaches. Maintaining items in use to support the transition to a circular economy. for as long as possible by enabling their reuse (when dis- carded by one user) and/or repair to keep them in opera- Repair can also be supported by using tax incentives for tion is typically associated with strong, net environment business models that focus on reuse and repair. In Sweden, benefits. If items cannot be repaired there can typically be for example, families can access tax relief of some 25,000 Kr significant environmental benefits from dismantling prod- per year (US$3,000) to cover labour charges paid to repair ucts to recover useful parts and components. companies for repairs to appliances326. VAT reductions on minor repair services are also made including, for example, The reuse and repair of items is well-established in repairs and alterations to bicycles, shoes and leather goods. many low and middle-income countries, where buying In the US states of California and New York tax deductions the products new is commonly not an option for much of are used for used goods, such as textiles, toys or furniture the population. Reuse has also become more common in donated to charitable non-profit organisations. high-income contexts as well, thanks to digital platforms such as eBay and gumtree that help people buy and sell Local government can play a key role in supporting initia- unwanted items. tives that promote reuse and repair by supporting local entrepreneurs and businesses to develop and implement However, major barriers still exist to increasing levels of business models focused on reuse and/or repair. This can reuse and repair. One key issue is that mass produced con- be achieved by offering small grants, providing free office sumer products are available at relatively low cost and space or discounted facilities. The concept of resource it is often cheaper and easier to buy new rather than to parks is well-established, particularly in Europe, where repair or reuse an old product. Fast changing consumer local governments offer businesses incentives to establish trends also act against reuse and repair, with consumers operations in a dedicated industrial park, thereby encour- preferring to purchase modern fashionable items rather aging groups of businesses with similar aims to develop in than reuse or repair older products, even if they are still close proximity to one another. functional. Making reuse and repair a key element of private sector The economic feasibility of repairing an item is also waste management contracts. A requirement to collect affected by the limited availability of spare parts, or by the items for reuse and repair, either from household collec- conditions imposed by the manufacturer (e.g. warranties tions or via collection points, can be built into private sec- are often invalidated if an item is repaired or if an attempt tor waste management contracts. This approach works is made to repair it). And in some cases, repair is just not particularly well for larger items, such as furniture, but possible. For example, many electronic devices now have can also be applied to household electrical appliances. an integrated battery that cannot be replaced, meaning that the device must be discarded if the battery fails. Local authorities can also support community level initia- tives. Many initiatives focused on repair start at the grass There is a range of measures that can help promote these roots level, organised by small businesses or volunteers in options as discussed below. communities themselves. For example, ‘Repair Cafes’ are At a central level, government can legislate to pro- spaces organised by community groups where visitors can mote repair as a viable option and to support the right of bring in broken items to be repaired free-of-charge by expert See http://www.rreuse.org/wp-content/uploads/RREUSE-position-on-VAT-2017-Final-website_1.pdf 326 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 175 volunteers with skills in various fields. While the events are Protection Agency. The objective was to set up a system often focussed on electronics, some Repair Cafes will accept of extended manufacturer’s responsibility by creating a many other kinds of broken items, such as clothes, furniture, recycling fund through fees charged to manufacturers and bicycles, appliances, etc. There are over 1,500 Repair Cafes importers to finance the sustainable recycling of old elec- worldwide which offer valuable practical knowledge, not trical appliances. The project promoted skill building in only on how to repair items but also on the value of items, recycling and disposal processes. It provided training in and which also instil a sense of community and confidence. recycling and disposal methods to improve environmental Many have joined the Repair Café International Foundation, practices and occupational safety. which ‘aims to maintain and spread repair expertise, and to promote social cohesion by bringing together neighbours 7.6 Waste prevention and minimisation from all walks of life and sets of motivations in the form of inspiring and accessible meetings’ 327. Once a Repair Café Waste prevention and minimisation sits at the top of the has been set up by the community, groups rely on the sup- ‘waste hierarchy’. There are numerous instruments that port of local authorities to approve licensing, insurance and can be used to promote this objective including aware- permissions needed to organise and operate it. ness-rising campaigns; charging for waste collection by weight; green procurement; eco-design standards; volun- This type of approach also applies to the concept of mate- tary initiatives; environmental accreditation standards; rial reuse, which is well-developed in several countries. product taxes; national product bans; localized product One such centre in Seattle, United States, founded in bans. These are marked briefly below. Each of these pol- 1997, has become the largest materials centre by volume icies could be explored in much more depth and detail, in North America. Dedicated teams of ‘deconstruction- which remains outside the scope of this paper. ists’ dismantle and collect materials from the city and its EPR schemes discussed earlier in this Chapter can also surrounds on a daily-basis, dismantling anything from ‘a promote waste minimisation if applied progressively. Pay- kitchen, to a full house, to a 100 year-old grain mill’328 and as-you-throw schemes were discussed in Chapter 4 and take them to the ‘Rebuilding Center’. Such initiatives offer awareness-building campaigns are discussed in Chapter 6. more than simply affordable reclaimed home improve- ment materials. They also offer opportunities for reuse Green public procurement education and repair skills workshops, often have twin- ning arrangements with educational facilities and provide Green public procurement can drive demand for recy- employment opportunities within the community. cled materials and support the development of a resource recovery industry. The public sector is a substantial pur- Reuse and repair is well-established in low and middle-in- chaser of products and services. This purchasing power come countries and typically functions without central or can be used to good effect by preferentially procuring local government support. Repair in low-income countries products and services that support resource recovery. is often carried out without proper health and safety pro- For example, by purchasing recycled paper or reusable tocols, monitoring of operational practices or regulatory items rather than single use products, such as coffee cups. control. This can lead to significant pollution and health ‘Green procurement’ can be undertaken unilaterally by a hazards to workers and the environment. For example, local authority but has far more weight if done as part of a repair and recycling of e-waste in such conditions can state or national level ‘green procurement’ policy. result in soil and surface water pollution by heavy metals. When it is to be introduced locally, guidance documents Similarly, improper recycling of refrigerators can result in and support can be used to encourage green procurement electrical cables being burnt and the production of toxic approaches. Individual local authorities may not have the gases and release of GHG emissions. capacity to research this issue and identify specific actions For example, in Ghana, technical assistance was provided to take. Central and intermediary level government has a by GIZ (German development agency) in 2016 to improve role to play here in providing guidance and support to help the policy framework for managing e-waste.329 It included local authorities and other institutions make purchasing capacity building for informal workers as well as public choices that support the principles of sustainable resource regulatory institutions, such as the Ghana Environmental management. 327 See https://repaircafe.org/en/foundation/ 328 See https://www.rebuildingcenter.org/what-we-do 329 See https://www.giz.de/en/worldwide/63039.html 176 7 Policy instruments For example, Italy’s National Action Plan on Green Public Voluntary initiatives Procurement (GPP) sets out the rules, requirements and Voluntary initiatives by the private sector can serve as an goals for the country’s public procurement. ‘The objective effective means of reducing waste and promoting recy- of the GPP is to integrate environmental considerations cling. Although achieving this type of involvement typically into the procurement process of Public Authorities and to depends on dialogue and collaboration between the private guide their choices of goods, services and works that have sector and national government, it can also play a key role the lowest environmental impact’330. Each public procure- in supporting local government efforts to promote recycling. ment exercise must satisfy a set of ‘minimum environmen- It is far easier for local authority to encourage behaviour tal criteria’ defined by the Ministry of the Environment, change if major brands, retailers and manufacturers are pro- in coordination with the GPP National Action Plan moting the same message and providing consumers with Management Committee. The criteria consist of both gen- purchasing opportunities to reduce their waste and recycle eral and specific considerations for various phases of the more. Establishing a dialogue between national government tendering process (e.g. the scope of the contract, techni- and industry is an essential component of this approach. cal specifications, the award criteria) and include metrics such as CO2 savings per Euro spent. Most notably, the New Plastics Economy Global Commitment332, led by the Ellen MacArthur Foundation in It is possible to go further than this by setting green pro- collaboration with UN Environment, unites businesses, curement targets and obligations on local authorities and governments, and other organisations behind a common public institutions. For example, the United Kingdom gov- vision and overarching targets to address plastic waste ernment banned the purchase of all disposal plastic drink- and pollution at its source. Two hundred and fifty orga- ing cups in all central government institutions in 2019. nizations, responsible for 20 percent of plastic packaging Product eco-design produced around the world, have committed to reducing waste and pollution as part of the commitment. Signatories Eco-design standards can be used to encourage or mandate must commit to a set of ambitious targets, many of which the manufacture of products that limit waste. Eco-design are focused on the current manufacture of the businesses’ represents the systematic integration of environmental products. For example, for packaging producers, retailers, aspects into product design with the aim of improving the and food service companies, these businesses must: environmental performance of the product throughout its entire life cycle. These instruments are typically developed ❚ Take action to eliminate problematic or unnecessary at the national level but can also be developed by producers plastic packaging by 2025 in tandem with approaches based on product stewardship. ❚ Take action to move from single-use towards reuse mod- Eco-design measures relate closely to those for ‘design els where relevant by 2025 for recycling’ described below. However, eco-design is a broader concept in that it seeks to minimise the environ- ❚ 100 percent of plastic packaging to be reusable, recy- mental impacts associated with a product’s manufacture, clable, or compostable by 2025 consumption and disposal. As such, eco-design princi- ples promote the minimisation of materials and support ❚ Set an ambitious 2025 recycled content target across all approaches that reduce the overall impact of a product plastic packaging used throughout its lifecycle. For example, in the EU eco-de- To demonstrate progress toward these targets, signato- sign is seen as part of Europe’s sustainable product pol- ries must disclose yearly action plans based on a common icy which aims to both lower resource consumption and commitment framework using common definitions, as well reduce the impact on the environment. The scope of EU’s as provide an update on their progress in a yearly report. Eco-design Directive331 is to be expanded to cover a wide range of products, beyond those related to energy. Priority Several governments have also endorsed the Global product groups are likely to include electronics, informa- Commitment’s common vision and have committed to tion and communication technologies, textiles, furniture introduce ambitious policies and (where relevant) mea- and high impact intermediary products such as steel, surable targets by 2025. Some countries (France, United cement and chemicals. Kingdom, Chile, Netherlands, South Africa and Portugal) 330 See https://www.minambiente.it/sites/default/files/archivio/allegati/GPP/all.to_21_PAN_GPP_definitivo_EN.pdf 331 See https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0125 332 See https://www.ellenmacarthurfoundation.org/our-work/activities/new-plastics-economy/global-commitment Bridging the Gap in Solid Waste Management | Governance Requirements for Results 177 have established national ‘Plastics Pacts’ that bring When considering whether to introduce a product ban it together key stakeholders at the national level to imple- is important to use an evidence-based approach to deter- ment solutions towards a circular economy for plastics. mine whether it would have the desired effect and if it would have any unintended consequences. In particular, Environmental accreditation standards it should be established whether other products, services Environmental accreditation standards encourage indus- or materials are readily available at affordable prices to tries to minimise waste both in their production processes replace the functions provided by the product that it is and in the services and products they provide. Key environ- proposed to ban. For example, banning disposable plas- mental management systems include the Eco-Management tic carrier bags is a measure that several countries have and Audit Scheme (EMAS) and ISO 14001 (International taken. Where plastic bags have been banned, alternative Organization for Standardization). products, such as reusable plastic or paper bags, have usually been readily available. However, it is important to Product taxes establish that replacement options for disposable plastic Product taxes create incentives to reduce waste. For exam- bags will be available to consumers and that the ban will ple, product taxes levied by many countries on single-use not have serious adverse economic consequences for the plastic carrier bags have considerably reduced their con- manufacturing sector. sumption. These instruments tend to be targeted at prod- It is important also to assess whether the use of replace- ucts that are commonly mismanaged. They are typically ment products or materials is likely to result in other introduced at the national or state level as they depend unintended environmental impacts. For example, whilst on national legislation. The level of the tax must be deter- replacing plastic milk bottles with glass bottles can con- mined carefully as it needs to be set at a level that encour- tribute to efforts to reduce plastic pollution, the greater ages customers to change their behaviour patterns without weight of glass bottles can result in higher levels of trans- unfairly penalising the producers. port-induced of air pollution. It is important that full For example, the annual average consumption of plastic life-cycle analysis is used when considering the overall bags in Colombia was estimated to about 288 per person, impacts of different products and materials. many of which are littered and end up on Colombian coast- In 2002, Bangladesh became the first country to ban sin- lines and waters, damaging the livelihoods of fishers and gle use plastic bags. More than 60 countries have since the tourism sectors, as well as marine wildlife. To mitigate introduced similar bans or levies334. In 2008, Rwanda this, the Colombian government introduced a tax on sin- banned the manufacturing, use, sale and importation of gle-use plastic bags in July 2017 to encourage consumers all plastic bags. Paper and reusable cotton replaced plas- to use reusable bags. Within 18 months, consumption of tic ones. Rwanda has been particularly successful in elim- single-use plastic bags had fallen by more than 50 per- inating plastic bag use, using a combination of measures cent. This success has encouraged the government to con- to strictly enforce the ban and to support industry in man- sider other initiatives to promote the use of alternatives to ufacturing alternatives.335 single-use plastics, including the introduction of legisla- tion that would prohibit the manufacture, import, sale and Local product bans distribution of single-use plastics by 2021.333 Applying a localised product ban is a variant of the National product bans national ban approach applied by local authority to ban problematic products in specific contexts. For example, An increasing number of problematic wastes, particularly banning single use drinks containers at major entertain- single use products such as disposable carrier bags, are ment events where they would have been consumed in being banned outright (see Box 29). Although policy on large numbers and would commonly have led to littering. product bans is usually defined and implemented at the The approach has been shown to be effective and one that national or state level, it is typically enforced at the local local authorities can apply using local ordinances without level. necessarily being authorised by national legislation. 333 Colombia’s plastic bag tax: A concrete step towards fighting marine litter in the Caribbean, UNEP, 2017, available at: https://www.unenvironment.org/ news-and-stories/story/colombias-plastic-bag-tax-concrete-step-towards-fighting-marine-litter#:~:text=This percent20is percent20why percent20as percent20of,tax percent20by percent2050 percent20per percent20cent 334 Single use plastics – a roadmap for sustainability, UNEP, 2018 335 Ibid 178 7 Policy instruments Box 29 Box: EU Single-use Plastics Directive The EU’s Single-Use Plastics (SUP) Directive336, adopted by Through the extension of the Extended Producer the European Parliament in June 2019, identifies a series of Responsibility obligations, producers of certain single use measures to tackle the most common single use products plastics will be expected to cover the waste management and found in marine litter. clean-up costs of food and drink containers, sweet and crisp packets and wrappers, cigarette buts, wet wipes, balloons The Directive bans plastic cottons buds, disposable cutlery and lightweight plastic bags. and plates, plastic straws, drink stirrers and balloon sticks, where alternatives are readily available and affordable. The Directive also introduces an Extended Producer Responsibility scheme for fishing gear containing plastics, The Directive also sets reduction targets for member states the aim being to encourage the responsible management of to reduce their consumption of plastic food containers and these materials and to prevent its abandonment at sea. drinks cups. 336 Directive (EU) 2019/904 of the European Parliament and the Council on the reduction of the impact of certain plastic products on the environment Bans on bottled water have been imposed in municipal- production and consumption models are needed to reduce ities throughout the world over concerns about resource and eliminate as far as possible these negative environ- efficiency and plastic pollution. For example, the US states mental impacts whilst at the same time providing condi- of California and Massachusetts, and some municipalities tions for economic growth and social development. The in Canada and India, have specifically banned the use of circular economy concept is nowadays considered to offer plastic mineral water bottles in all government offices and a solution for decoupling economic growth from the con- events, and the use of public funds for the procurement of sumption of finite resources and for building up economic, plastic bottles for individual consumption. natural and social capital for the benefit of the environ- ment, business and society (see Figure 12). 7.7 The circular economy as a longer- According to the Ellen MacArthur Foundation337,338: term objective ‘The present linear model of resource consumption mainly The circular economy concept is only briefly mentioned follows a ‘take-make-dispose’ pattern where companies har- here. It is an evolving concept that spans across vast seg- vest and extract materials, use them to manufacture a prod- ments of the economy and will influence how industries uct, and sell the product to a consumer—who then discards it and business processes and organized. The depth and when it no longer serves its purpose. extent of it remain outside of this publication. A circular economy is a system level approach that is restor- ative or regenerative by intention and design. It replaces the 7.7.1 About circular economy ‘end-of-life’ concept with restoration, shifts towards the use With growing concern over increased waste genera- of renewable energy, eliminates the use of toxic chemicals, tion and the impact of human activities on climate, new which impair reuse, and aims for the elimination of waste 337 Towards the circular economy, Ellen MacArthur Foundation, 2013 The definition provided by Ellen MacArthur Foundation is the most prominent definition of CE as stated by Geissdoerfer et al. (2017, p.759) as well as 338 Schut et al. (2015, p.15) according to J. Kirchherr et al. (2020). Nevertheless, so far there is no common internationally recognized definition of CE. For example, the first EU circular economy Action Plan (2015), a circular economy is explained as an economy ‘where the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized’, the Dutch Ministry of Infrastructure and the Environment describes a circular economy as ‘an economic system based on the reusability of products and product components, recycling of materials, and on conservation of natural resources while pursuing the creation of added value in every link of the system’. In the publication of J. Kirchherr et al. (2020) considering CE publications in the period after 2010, 95 different definitions are used in a sample of 114 publications. The authors of same publication propose the following definition of CE: ‘A circular economy describes an economic system that is based on business models which replace the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes, thus operating at the micro level (products, companies, consumers), meso level (eco-industrial parks) and macro level (city, region, nation and beyond), with the aim to accomplish sustainable development, which implies creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations.’ Bridging the Gap in Solid Waste Management | Governance Requirements for Results 179 through the superior design of materials, products, systems, Secondly, circularity introduces a strict differentiation and, within this, business models. The circular economy is between consumable and durable components of a prod- built on three principles: designing out waste and pollution; uct. Unlike today, consumables in the circular economy are keeping products and materials in use; and regenerating the largely made of biological ingredients that are non-toxic natural systems. and can be safely returned to the biosphere—directly or in At the first place, in circular economy the waste does not a cascade of consecutive uses. Durable components such as exist, and products need to be designed and optimised for engines or computers, on the other hand, are made of tech- a cycle of disassembly and reuse. Such concept is aiming to nical ingredients unsuitable for the biosphere, like met- completely eliminate waste disposal and even setting prod- als and most plastics. These are designed from the start for uct cycles apart from waste recovery and even recycling reuse. Thirdly, the energy required to fuel this cycle should where large amounts of embedded energy and labour are be renewable by nature, again to decrease resource depen- lost. dence and increase system resilience (e.g., to oil shocks). Figure 12 The circular economy – an industrial system that is restorative by design 1 Hunting and fishing 2 Can take both post-harvest and post-consumer waste as an input Source: Ellen MacArthur Foundation Circular economy systems diagram (February 2019) www.ellenmacarthurfoundation.org Drawing based on Braungart & McDonough, Craddle to Cradle (C2C) 180 Maldives, South-Male-Atoll, plastic waste disposal with digger. Photo: Martin Moxter 7 Policy instruments For technical ingredients, the circular economy largely recycling. Digital technology has the power to support the replaces the concept of a consumer with that of a user. This transition to a circular economy by radically increasing vir- calls for a new contract between businesses and their cus- tualisation, dematerialisation, transparency, and feedback tomers based on product performance. Unlike in today’s driven intelligence.’ ‘buy-and-consume’ economy, durable products are leased, Applying circular strategies focused on waste prevention, rented, or shared wherever possible. If they are sold, there re-use and recycling also has the capacity to bring about are incentives or agreements in place to ensure the return substantial reductions in GHG emissions. It has been and thereafter the reuse of the product or its components and argued that if applied to the four key industrial materials materials at the end of its period of primary use. of cement, steel, plastic and aluminium, circular economy In other words, the circular economy model distinguishes strategies could help reduce emissions by 40 percent by between technical and biological cycles. In biological cycles, 2050; applied to the food system a reduction of 49 per- food and biologically based materials (e.g. cotton or wood) cent could be achieved.339 feed back into the system through processes such as com- The following measures for transforming the way products posting and anaerobic digestion. These cycles regenerate are designed and used can also cut GHG emissions340: living systems (e.g. soil), which provide renewable resources for the economy. Technical cycles recover and restore prod- ‘Designing for circularity. This approach will require prod- ucts, components, and materials through strategies includ- ucts to be designed for disassembly, modularity, repair- ing reuse, repair, remanufacture, or (in the last resort) ability, flexibility or biodegradability, and to enable reuse, 339 Completing the Picture: How the Circular Economy Tackles Climate Change, Ellen MacArthur Foundation, 2019 340 Ibid Bridging the Gap in Solid Waste Management | Governance Requirements for Results 181 remanufacturing, refurbishment or regeneration. For exam- The first three measures serve to design out waste and pol- ple, if ‘refill’ bottle designs and models were to be applied lution leading to reduced GHG emissions across the value to all bottles in beauty and personal care as well as home chain. The final two measures - reuse and recirculation – cleaning, packaging and transport savings would represent support keeping products and materials in use to retain an 80–85 percent reduction in GHG emissions compared to their embodied energy. The circular economy favours today’s traditional single-use bottles.341 activities that preserve value in the form of energy, labour, and materials. Eliminating waste. Design can play an important role in eliminating waste. By designing for material efficiency, The circular economy also favours the use of renewable material input can be reduced, while designing for opti- resources and aims to enhance natural systems by return- mised supply chains can reduce waste generation; both offer ing valuable nutrients to the soil which offers opportuni- effective ways of lowering the amount of energy and mate- ties for carbon sequestration. rials used per unit of GDP. For example, half the aluminium produced each year does not reach the final product but 7.7.2 The circular economy and waste becomes scrap, while some 15 percent of building materi- als are wasted in construction. When it comes to food waste management today, one out of every four food calories intended for people Waste management is a core element of the circular is not ultimately consumed by theme. In other words, 24 per- economy. cent of food calories produced for human consumption are lost or wasted across the value chain.342 Linkages between the circular economy and waste man- agement can best be seen by exploring circularity strate- Substituting materials. Material substitution refers to the gies (see Figure 13). The strategies – which aim to reduce use of renewable, low carbon, or secondary materials as the amounts of resources used and to minimise the amount alternative inputs to new production. These provide the same of waste produced – can be related to product chains in function but contribute to lower emissions. For example, order of their priority. For example, smarter product use some bio-based plastics have been shown to have a negative and manufacturing typically ranks higher than extending emissions potential with -2.2 kg CO2e per kg of bio-based the lifetime of a product as it enables the product to be polyethylene (PE) produced, compared to 1.8 kg CO2e per kg used repeatedly whilst fulfilling the same function or for of fossil-based PE produced.343 more users to be served by the one product (strategy with Reusing products and components. Reuse measures have high circularity). Lifetime extension is the next preferred one purpose and that is to conserve the embodied energy option, followed by recycling through materials recovery. and other valuable resources used to manufacture products, Incineration with energy recovery is ranked lowest in the components, and materials. The more a product is utilised, circular economy as the materials have a one-time use and the larger the savings should be in terms of resources that cannot be recirculated (low-circularity strategy). Higher are already embodied into the product such as material, levels of circularity tend to be associated with higher lev- labour, energy, and capital. Moreover, by keeping products els of environmental benefit.345 and materials in use, GHG emissions associated with new ‘The circular economy is focused on the entire product chain. material production and end-of-life treatment are avoided. A product chain tracks products from the extraction of nat- Recirculating materials. Recirculation refers to the recycling ural resources to waste treatment after they have been dis- of materials in the technical and biological cycle. GHG emis- carded. Recovering materials from a discarded product sions are reduced from avoiding new virgin material pro- often requires large amounts of energy, and pollution and duction and end-of-life treatment, such as incineration and mixing of materials reduces their quality which means that landfill. For plastics, recycling 1 tonne could reduce emis- very often recycled (secondary) materials cannot be applied sions by 1.1–3.0 tonnes of CO2e compared to producing the again for the same type of product. Frequently, these mate- same tonne of plastics from virgin fossil feedstock.344’ rials do find an application in other products with lower 341 The new plastics economy: catalysing action, Ellen MacArthur Foundation, 2017 342 Creating a sustainable food future: reducing food loss and waste, World Resource Institute (WRI), June 2013 343 The new plastic economy: rethinking the future of plastics, Ellen MacArthur Foundation, 2014 344 The new plastics economy: rethinking the future of plastics, Ellen MacArthur Foundation, 2016 345 Potting, J., Hekkert, M., Worrell E. and Hanemaaijer, A., Policy Report Circular Economy: Measuring innovation in the product chain, 2017 182 7 Policy instruments Figure 13 Circularity strategies within the production chain, in order of priority Circular economy Strategies Make product redundant by abandoning its R0 Reuse function or by offering the same function with a radically different product Innovations Smarter in core Increasing product Make product use more intensive (e.g. technology circularity use and R1 Rethink through sharing products, or by putting manufacture multi-functional products on the market) Innovations Increase efficiency in product manufacture in product R2 Reduce or use by consuming fewer natural design resources and materials Re-use by another consumer of discarded R3 Re-use product which is still in good condition and Innovations fulfills its original function in revenue Rule of thumb: model Higher level Repair and maintenance of defective of circularity– R4 Repair product so it can be used with its original function fewer natural Socio- resources and less Extend institutional environmental lifespan of Restore an old product and bring it up R5 Refurbish change pressure product and to date its parts R6 Use parts of discarded product in an new Remanufacture product with the same function Use discarded product or its parts in a new R7 Repurpose product with a different function Process materials to obtain the same R8 Recycle (high grade) or lower (low grade) quality Useful application of materials Incineration of materials with energy R9 Recover recovery Linear economy Source: Potting et al. (2017, p5) quality requirements. Therefore, a material chain may be by giving priority to waste prevention as the preferred longer than a single product chain. environmental option, followed by re-use, recycling and recovery. In a circular economy, the materials recycled from a dis- carded product ideally retain their original quality so that It is also accepted that transitioning up the 9Rs strategies, they can be applied again in a similar product. As a result, as with the ‘waste hierarchy’, increases the environmen- no additional natural resources are needed to produce mate- tal benefit but requires enhanced governance and regula- rials, and discarded products no longer become waste. tory complexity and comes with increased financial cost. This ultimate circularity, in which a product chain is closed As part of the more sophisticated governance structure because the materials can be applied over and over again is and enabling environment, economic incentives and com- probably not feasible in practice. It is, however, the ideal sit- pliance are expected to be required and expanded beyond uation which CE transitions aspire to bring about.346’ consumers to manufacturers and producers. It is accepted that the priority given to the circularity strat- egies builds upon the widely adopted ‘waste hierarchy’ Ibid 346 Bridging the Gap in Solid Waste Management | Governance Requirements for Results 183 In a business-as-usual scenario, and given projected waste Beans bundled in plastic and banana leaf in Bali, Indonesia. Photo: Marlon Trottmann generation growth forecasts and the ways in which munici- pal waste management services are currently organized and financed, a progressive worsening of the imbalances between higher and lower income countries seems almost inevitable. In the meantime, pollution of the air, soil and oceans is becoming a major environmental emergency which demands immediate attention. A business-as-usual scenario is not sustainable and must change. Extending municipal waste collection services and providing for the safe disposal of wastes must be the imme- diate priority for countries that contribute to pollution loads, along with concerted efforts to enhance the environmental awareness of constituencies and inspire behaviour change. These ‘downstream’ solutions (postconsumer, such as recy- cling and disposal), though regarded as transitional, are 7.7.3 Way forward foundational and a prerequisite for a transition upwards on the ‘hierarchy’ and the 9Rs strategic objectives. Current production and consumption patterns have a long way to go to internalize the circular model. Similarly, uti- Both ‘upstream’ solutions (pre-consumer, such as material lization of ‘waste’ materials and products through the redesign, plastic reduction, and substitution) and ‘down- implementation of circular strategies is at the beginning stream’ solutions must be applied in parallel.347 Expanding of an intended transition period. waste collection services in low- and middle-income coun- tries, providing support to the informal sector and build- Transition to the circular economy is likely to advance at dif- ing facilities as a transitional measure to dispose of waste ferent speeds in the high-, medium- and low-income coun- materials that cannot be recycled economically, must be tries and will depend on their baseline conditions, economic applied together with circular strategies focused on waste development, national income and financial capacities. There prevention and reduction.348 is a concern that the ‘waste management gap’ between coun- tries, including in waste prevention and waste material utili- Concerted effort will be required. Active collaboration zation, will widen further before it begins to converge. This between governments, businesses, the manufacturing indus- is due largely to dramatically different conditions, with most try, entrepreneurs and the R&D community, philanthropic high-income countries implementing advanced waste man- and citizens’ organizations will be needed. Above all, an agement technologies and moving towards circular economy environmentally aware and inspired world population must policies whilst low- and many middle-income countries con- drive the change towards sustained environmental practices tinue to struggle with implementing and sustaining the most – demanding action from administrations and individually basic of waste management services. practicing sustained consumption and utilization behaviour. 347 Breaking the Plastic Wave: A Comprehensive Assessment of Pathways towards Stopping Ocean Plastic Pollution, The Pew Charitable Trusts and SYSTEMIQ in partnership with Oxford University, University of Leeds, Ellen MacArthur Foundation and Common Seas 348 Ibid Administered by