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Bonds and insurance proposed to ease burden of waste incidents

Resource minister Dan Rogerson has said he wants to introduce a bond system for waste companies so that money is available for waste fire and pollution incidences.

Alan Beith, MP for Berwick-upon-Tweed, raised the notion in the House of Commons when challenging Rogerson over the Environment Agency’s (EA) actions over a six-month fire at a Thrunton carpet recycling facility.

Dan Rogerson

In response, Rogerson (left) said: “I have challenged the agency to come to me with proposals on this issue. I am pleased to say that it is exploring, with representatives of the waste management industry, how operators can ensure that they are in a position to fund their obligations, including any potential clear-up and reducing the risk of the abandonment of waste and waste fires.”

Industry members have expressed concern that the financial burden of many waste incidents are landed on local authorities.

As a result, David Palmer-Jones, chairman of the Environmental Services Association, told MRW: “We are looking at linking insurance with (environmental) permits.

“You have to set some barriers to entry into the industry.”

He said linking insurance to permits would lift the burden of the cost of waste crimes off local authorities back onto the company involved.

Paul Levett

Paul Levett (left), director of Waste Transition and board member of several other waste companies, told MRW: “Insurance may well be worth exploring in terms of illegal activities, pollution and fires.

“A bond might be more difficult because, you don’t want to create so many barriers that a legitimate player can’t enter the industry, because of the availability of bonds being influenced by the banking market at the time.

“I think insurance is probably the better way to go, but none of these things really work unless you have strong enforcement of regulations.”

Levett also expressed concern over conditions within insurance policies that could exclude crimes.

Phillip Ward

Former WRAP director of local government services Phillip Ward (left) told MRW: “There used to be a bonding system for landfill operators so the principal is not entirely new, but it has a lot of potential.

“It’s a solution, which in a sense big companies quite like as they can afford the bonds and it helps keep the competition down.”

Ward added: “If it is going to prevent innovative new businesses coming into the sector that would be a bad thing so you have to balance those out somehow.”

He said the insurance route would be more affordable as there is no requirement to pay a lump sum in advance.

  • Beith’s call echoed possibilities raised by Eunomia’s waste crime report ‘Tackling Britain’s Dirty Secret’, which proposed legislation to ensure companies have enough financial reserves to deal with potential disasters.

Bond issue raised in the Commons

Alan Beith: “Blackwater (the Thrunton carpet facility operator) has apparently shown its bank statements to the EA, and has said that the business has no money to fund a clean-up operation.

“The company should have received well over £600,000 for taking carpet for recycling, yet no funds were set aside for dealing with the aftermath of potential disasters.

“Should there not be a bond system, such as existed until 2003, so that money is available for emergency clean-ups, given the increasing number of waste fires around the country?

“All the EA now does is to check the financial competence of the operator, a system which completely failed in this case. If something is not done, many more people will suffer as my constituents have done.”

Readers' comments (1)

  • If this proposal is what i think it is,it will mean all Skip Hire and Waste Companies will have to pay a Bond to the Enviroment Agency to cover any protentual Enviromental disaster. This may be okay for the larger Companies, but the small Skip Hire operators are already REELING , from all the extortional Legislation being thrown at them, with absolutely no help from the Government, who, quite frankly, could"nt care tuppence. I am afraid this may be the legislation which, finally, will break the Camels Back. Is their anybody out there who can help us, to stop the wolf killing us.

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