Agency delays changes to financial provisions for landfills

Financial provisions play a key part in ensuring that there are sufficient funds available in case there are problems with a landfill site when it has closed. In particular, provision is needed to ensure mechanisms are in place to pay for remedial work should the company with responsibility for the site become insolvent.

The postponement of the January 1 date comes after heavy lobbying from the waste management industry which has voiced strong concern that the Agency was unnecessarily limiting the types of financial measures that would count in the provision regulations.

For its part, the changes in financial provisions are necessary, the Agency has said, in the wake of the Landfill Directive and recent legal rulings.

”We are deferring implementation of our new policy from the originally proposed date “
– Liz Parkes – Environment Agency Liz Parkes, head of waste regulation policy at the Agency, said that the Agency had had a good number of responses to its proposals to change the way that landfill operators fund the management and maintenance of landfill sites after they have closed.
She added: “As a result, we are deferring implementation of our new policy from the originally proposed date of 1st January 2005 in order to:

• give full and detailed consideration to the responses submitted;

• work with those respondents who have submitted alternative proposals to form solutions which meet the Environment Agency's policy objectives, and;
• meet with those who indicated in their consultation responses a wish for further discussions.”

”The Agency's proposals would have sterilised huge amounts of capital “
– Mike Walker – ESA Ms Parkes said the new regime would not be implemented “before 9 May 2005” and a further announcement will be made in early 2005.

Commenting on the announcement, Mike Walker, director of policy at the Environmental Services Association, said: “The Agency's proposals would have sterilised huge amounts of capital. DEFRA must now take the lead and develop a workable mechanism.”

Individual waste companies are also expected to welcome the delay. Some have recently argued that the use of bonds should be allowed as these can be drafted in such a way as to allow the Agency to call on the bond in the event that the operator is failing to comply with its commitments.