Waste and resource management

Navigating key legislation in the waste sector

With waste legislation in the UK seeing little change due to Brexit uncertainties, Georgie Messent and John Bruce of Pinsent Masons look ahead to the key legal issues businesses should be aware of in 2018. 

Navigating the Brexit uncertainty

The ongoing Brexit negotiations1 mean legislative change affecting the waste sector slowed down in 2017. Usually the sector see numerous amendments, additions and withdrawals to waste management law and regulation but there has been little change over the last year.

With the negotiation of a robust trade deal firmly at the top of the government’s priority list, environmental issues have dropped to the bottom of the list. Ministers are wary of pushing for legislation that differs too much from the current EU framework, for fear that any changes could conflict with agreements that might be reached in the coming months.

This is creating a challenging and uncertain environment for the waste management sector and has resulted in a drop in confidence for some. Equally the range of potential outcomes from the negotiations mean that many companies have felt unable to make strategic plans or decisions.

Planning for the future

However frustrating this current climate may be, it’s imperative that the waste sector starts to plan for the future. So far, most firms in the sector have been reluctant to focus on this. However every company has a variety of stakeholders that need to be protected in case of a challenging Brexit outcome, and they need to be managed in advance of the UK’s exit from the EU in March next year.

A new focus on enforcing waste laws

While legislative changes have been slow, we have seen a new focus from the UK government on regulation and a tougher enforcement of existing waste laws.

The experience of Thames Water shows how this is affecting companies. It was first fined £20.3 million2 for numerous sewage spillages in 2013 and 2014. This was followed by a £8.5 million penalty3 for failing to cut water leakages from its pipes in June last year. These were some of the largest fines posed for a waste offence, reflecting court guidance to issue penalties in proportion to turnover. As a result, companies are reviewing their processes to ensure they do not suffer the same fate.

They are not only looking at the effectiveness of their standard practices, but also preparing procedures if something does go wrong. The stricter approach from environmental agencies means it is vital to have robust contingency plans if the worst happens.

New opportunities in UK waste treatment facilities

One area where legislative uncertainty isn’t necessarily having an adverse impact is the development of energy from waste. In fact, the potential for increased restrictions around waste exports, along with higher export costs due to a weakened pound, has further highlighted the need for the UK to be able to deal with its own domestically created waste.

With the future export market likely to decrease, coupled with less landfill space and high landfill taxes, energy-from-waste facilities are potentially attractive to investors. This is reflected in the fact that there are 40 new proposed energy-from-waste facilities in varying stages of pre-contract development throughout the UK.

For the developers of these projects, the key concerns will be less about Brexit and legislative uncertainties, and more about the robustness of their chosen technology and waste supply arrangements. Equally, they will want to make sure they can get ahead of competitors in securing the expertise of the limited number of construction and operating contractors in the market.

References

  1. ‘Brexit’, Financial Times, 23 April 2018 
  2. ‘Thames Water hit with record £20m fine for huge sewage leaks’, The Guardian, 22 March 2017
  3. ‘Thames Water given maximum £8.5m fine for missing leak target’, The Guardian, 14 June 2017

Download the Annual waste and resource management review for our retrospective analysis of activity in the waste sector and a look forward to the key trends that will drive the sector for the next 12 months.