New Waste Management and Treatment Rules : England & Wales

New rules under the Landfill (England and Wales) Regulations 2002 (as amended) come into force in England and Wales this week.

The new rules may have a material impact upon construction costs.

Effect of the new rules

Landfills in England and Wales will no longer be able to accept non-hazardous waste that is either liquid or untreated.

For waste to be treated, these three tests must all be satisfied:

• It must undergo a physical, thermal, chemical or biological process (one such process could be sorting);

• It must change the characteristics of the waste; and

• It must do so in order to (i) reduce its volume, (ii) facilitate its handling, or (iii) enhance its recovery.

Treatment of waste may, of course, involve additional cost – but at what level?

Gauging the additional burden

From a practical perspective, the increased burden of waste management and disposal may not be especially sizeable. Scotland provides a benchmark as, since 11 April 2003, the Scottish Environment Protection Agency has been obliged to include as a condition of landfill Pollution, Prevention & Control permits a similar requirement for pre-treatment of waste.

The Scottish experience suggests that the pre-treatment requirement for non-hazardous waste can be fulfilled by simply separating out general waste streams for re-use or recycling.  Where such segregation is possible, it can be (and, in many cases, already is) done by the main contractor or a sub-contractor.  However, compaction (e.g. of cardboard boxes) will not qualify as pre-treatment in England and Wales.

Who is responsible?

The principal legal obligation under the new rules lies with landfill operators. 

But there are three reasons why it appears likely that main contractors will bear the practical commercial burden:

• Landfill operators are likely to require evidence that waste has been treated before it is accepted for landfill.  

The Environment Agency envisaged that the necessary evidence will be in the relevant waste transfer note or a separate  written declaration from the waste producer (e.g. the sub-contractor) or waste manager (e.g. the main contractor).  An example written declaration is provided at Annex 1 to the Environment Agency’s guidance on the new rules.

• Treatment of waste, and its disposal, are typically the contractor's responsibility. In JCT 2005, for example, Clause 2.1 requires the contractor to carry out and complete the Works in compliance with the Statutory Requirements, and that is likely to include the new rules.  If the Works include disposing of non-hazardous waste off-site, then the landfill operator will require evidence that such waste has been treated.  As treatment, and then disposal, of the waste, will be work necessarily required to complete the contractor's Works, it is likely to be included in the Contract Sum.

• In any event, the Environmental Protection Act 1990 places an obligation on businesses to ensure that any waste produced is handled safely and within the law.  This "duty of care" applies to anyone who produces, imports, transports, stores, treats or disposes of controlled waste from business or industry.  Breach of it is an offence which carries a fine in respect of non-hazardous waste. 

Estimators will therefore have to gauge the marginal increase in the cost of waste treatment and disposal, and provide accordingly in their tenders.

Sub-contracting non-hazardous waste treatment

Where a main contractor delegates to a sub-contractor the responsibility for disposal of material off-site, it must be careful to ensure that the treatment cost risk is that of the sub-contractor (e.g. by referring to the Regulations specifically).  A delegating main contractor must also ensure that the sub-contractor does treat and dispose of waste properly, as the main contractor will retain liability.  The "duty of care" referred to above cannot be defeated by contracting disposal to a third party. 

Conclusion

It will be important to monitor the implementation of the new rules, and the way in which they are policed by the Environment Agency.  

Contractors' approaches to tendering will have to be sensitive to the approach of the Environment Agency, anticipating and reflecting the extent to which the Environment Agency will require contractors to go in satisfying the rules. 

Guidance is available on the Environment Agency website, including specific notes on the pre-treatment of contaminated soils and inert waste:  www.environment-agency.gov.uk.

Vivien Welsh Senior Associate Construction & Engineering Team Tel. +44 (0)131 777 7098 vivien.welsh@mcgrigors.com

Ross McDowall Senior Associate Real Estate Team Tel. +44 (0)141 567 9236 ross.mcdowall@mcgrigors.com

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