Uncertainty about impact of transfrontier waste rules

An EC Regulation on transfrontier waste shipments was finally agreed by Environment Ministers on 20 October after almost two years' wrangling. The rules increase the scope for Member States to block waste imports, but leave open the possibility that they could expose themselves to legal challenges if they breach EC free trade rules. Extensive new controls have also been imposed on shipments of waste intended for recovery, and on both imports to and exports from the Community.

The Regulation will replace and extend existing EC rules, last amended in 1987, on transfrontier shipments of waste within, into and out of the Community. Unlike the existing legislation, which covers only hazardous waste, it will apply to all waste, as defined in other EC rules.

The Regulation can only be adopted after the European Parliament has delivered its opinion. This may be done in time for adoption at the next Environment Council in December. The Regulation would then enter into force around March 1994. Adoption would also clear the way for the Community to ratify the global Basel Convention on transfrontier movements of hazardous waste, which the Regulation was largely designed to implement.

Negotiations on the draft Regulation were prolonged by disputes on several issues. One of these was the European Commission's insistence that the rules for waste movements across national frontiers should also apply to movements across administrative boundaries within Member States. On this count the Commission lost.

Meanwhile, environmentalists pressed for the Regulation to ban waste exports from the EC altogether, whether for disposal or recovery, claiming that the latter is often a cloak for waste dumping in developing countries and eastern Europe. Their demands were largely unsuccessful in taking EC policy beyond the provisions of the Basel Convention.

The sticking-point in recent months was the insistence of France and the UK on the one hand that all EC countries should rapidly become self-sufficient in disposal capacity, and the concerns of the smaller Member States on the other that this would leave them without disposal outlets for wastes requiring specialist treatment in particular.

Looming behind this dispute was a conflict between the free trade and environmental provisions of the EC Treaty. This was the subject of a recent case in the European Court of Justice brought by the Commission against Belgium over a ban imposed by the Walloon region on waste imports from foreign countries.

The Court ruled that the ban was illegal inasmuch as it applied to all hazardous waste, since the EC's transfrontier shipment legislation permits bans only on individual waste shipments. But it also held that a general ban on non-hazardous waste was not inconsistent with the EC Treaty, since its free trade provisions could be overridden by a Treaty requirement that environmental damage must be rectified at source. It followed, the Court concluded, that waste should be disposed of close to its source in order to limit its movement (ENDS Report 210, p 38 ).

The Court's verdict in this case is important because it lays down a number of ground rules which will be of relevance for the new regime.

Under the compromise pieced together on 20 October, Member States will be able to "prohibit generally or partially or to object systematically to shipments of waste" where they consider this necessary to implement three accepted principles of EC waste policy. These are the principles of "proximity" - meaning that waste should be disposed of as close to its source as possible - of self-sufficiency, and of priority for recovery. But any such restrictions must be in accordance with the EC Treaty.

However, in the case of hazardous waste generated within a Member State "in such a small quantity overall per year that the provision of new specialised disposal installations within that State would be uneconomic," such restrictions will not be permitted. Instead, the two Member States concerned will have to co-operate "with a view to resolving the issue bilaterally", and if this proves impossible the matter will be referred to a committee of national officials chaired by the Commission. This was the formula used to satisfy Eire, Portugal, Greece and Luxembourg.

The text goes on to provide for both exporting and importing countries to raise "reasoned objections" to proposed shipments of waste. These could seek to invoke the principle of self-sufficiency in disposal capacity at Community and national level, or to give priority to waste from a nearer source, or to ensure that shipments are consistent with waste management plans.

The Regulation clearly goes further than the existing transfrontier shipment rules in permitting Member States to object to waste imports on a broad, rather than a case-by-case, basis. But just how far it allows them to go will probably have to be tested in the European Court of Justice.

Interpretations of what had been agreed were certainly not consistent after the Environment Council. The French appeared to believe that the Regulation gives them a free hand to ban any waste imports. For the UK, Environment Secretary Michael Howard was more guarded, commenting that bans would be acceptable "in principle".

But the Commission, which dislikes the idea of import bans on the grounds of free trade, was insistent that Member States which imposed sweeping import bans would be exposing themselves to action in the European Court of Justice if the bans could be shown to be discriminatory.

However, the Court's ruling in the Walloon case does not appear to give the Commission strong grounds for optimism that it could bring a successful case on the grounds of discrimination. Rather than consider the Wallonian rules on their specific merits, the Court came to the sweeping conclusion that they did not offend the principle of discrimination because it was a general requirement of the EC Treaty that environmental damage should be remedied at source.

The arguments, no doubt, will continue, and it may be that the UK will be the first to test the new rules. Although it has been UK policy for some years to discourage hazardous waste imports from developed countries, the Government has only recently shown that it is in earnest by refusing consignments from Australia and Switzerland (ENDS Report 209, p 23 ). It will now be expected to follow up by showing its hand on imports from EC countries.

Meanwhile, the bulk of the new Regulation is devoted to laying down procedures and controls for waste movements involving different groups of countries, with separate provisions being made for wastes intended for disposal and those intended for recovery.

  • Shipments within the EC of wastes for disposal:
    The controls laid down by the Regulation incorporate the basic elements of the existing rules for hazardous waste, but also contain several refinements and additional requirements.

    The existing rules rely on the notification of an intended waste shipment to the importing country, which must acknowledge receipt of the notification and subsequently make any objections, impose any conditions and/or assent to the shipment within specified periods. Minor changes have been made to the post-notification procedures and periods.

    Consignees will be obliged for the first time to send a certificate of disposal to the notifier and all the authorities involved within 180 days of receipt of the waste.

    The existing rules laid down a general requirement for a contractual agreement between the notifier and consignee. The new Regulation specifies that this must include both an obligation on the consignee to provide a certificate of disposal, and a duty on the notifier to take the waste back in specified circumstances. The latter requirement is a consequence of other new rules on what must be done where a shipment is illegal or cannot be completed within the terms of a notification or contract (see below).

    The Regulation also appears to create a preferred hierarchy of notifiers for the first time. The notifier is defined as the waste producer, or "where this is not possible" a licensed collector or registered dealer or broker, or, "where these persons are unknown and not licensed", the waste holder. This apparent hierarchy applies to all waste movements.

  • Shipments within the EC of wastes for recovery: The control regime in this area is based on a classification of wastes intended for recovery which was developed recently by the OECD. The classification system places particular wastes on a red, amber or green list, depending on their hazardous properties. The lists are repeated in the Regulation, but are too long to be reproduced here.

    Under the Regulation, wastes on the green list will simply have to be accompanied by information such as the quantity and commercial description of the waste, the identities of the holder and consignee, and the type of recovery operation involved. The materials involved range from waste paper to plastics, glass, and metals and alloys in metallic and non-dispersible form.

    Shipments of waste on the amber list will be subject to a prior notification similar to that applicable to wastes for disposal, as well as a contractual agreement. A certificate that the waste has been recovered "in an environmentally sound manner" will also have to be sent to the notifier by the consignee within 180 days of receipt of the wastes.

    The authorities of dispatch, destination and transit will all have 30 days in which to object to a shipment of amber waste on the same grounds as those for wastes for disposal. They may also object "if the ratio of recoverable to non-recoverable waste, the estimated value of the materials to be finally recovered and the cost of disposal of the non-recoverable fraction do not justify the recovery under economic and environmental considerations."

    A key difference between the procedures for amber wastes and wastes for disposal is that, while a shipment of the latter may not proceed without the consent of the importing country, a shipment of the former may proceed after the 30-day period for objections has expired.

    For wastes on the red list, or those which have yet to be assigned to any of the three lists, the procedures applicable to amber wastes will apply, except that the prior consent of the authorities will be required before a shipment may proceed.

  • Exports for disposal outside the EC: All exports of waste for disposal in third countries will be banned, except to EFTA countries which have ratified the Basel Convention. Exports to EFTA countries will also be banned if they have prohibited or not given their written consent to them, or if a Member State believes that the waste would not be handled by "environmentally sound methods".

  • Exports for recovery outside the EC: Less restrictive rules will apply in this case. Exports for recovery are subject to a general prohibition, unless they are destined to an OECD country, other countries with which the EC has an agreement consistent with the Basel Convention, and, for a transitional period of undefined duration, countries with which individual Member States have made bilateral agreements prior to the Regulation's entry into force.

    In both the latter two cases, the agreements concerned must "guarantee an environmentally sound management of the waste" in accordance with the Convention, "guarantee that the recovery operation is carried out in an authorised centre which complies with the requirements for environmentally sound management", and fix conditions for the treatment of the non-recoverable fractions of the waste including, "if appropriate", a duty on the notifier to take them back.

    The operation of these agreements is to be reviewed periodically by the Commission, and for the first time by the end of 1996. If the review concludes that the existing guarantees are inadequate, "the continuation of waste exports under such terms shall, on proposal by the Commission, be reconsidered, including the possibility of a ban."

    The Regulation's provisions in this area are potentially far-reaching. Environmental groups can be expected to turn their attention to identifying further examples where trade in waste for recovery has resulted in environmentally unsound practices. The scale of this trade is substantial, and sensible companies will recognise that the Regulation demands a fundamental reappraisal of existing practices. A great deal hangs on their performance over the next three years.

    The Regulation goes on to add a number of more detailed provisions in this area. It imposes a ban on exports for recovery even to those countries listed above where any such country has itself prohibited all imports of such waste or has not consented to its "specific import". A ban will also apply where the exporting country believes that the waste would not be managed by "environmentally sound methods."

    The control procedures laid down for shipments of waste for recovery within the EC will also apply in broadly similar fashion to exports to third countries. However, third countries outside the OECD area will be asked to confirm that they are content that shipments of wastes on the green list need not be subject to the prior notification and control rules applicable to amber and red list wastes. Prior automatic export licensing may also be established by the EC for some green list wastes.

  • Imports of waste to the EC for disposal: In broad terms, the Regulation bans such imports unless they originate from a country which has ratified the Basel Convention, or which has made an appropriate agreement with the EC or individual Member States before the Regulation enters into force.

    However, Member States are also permitted to make such agreements after the Regulation takes effect "in exceptional cases for the disposal of specific waste, where such waste will not be managed in an environmentally sound manner in the country of dispatch." The latter will have to present a "duly motivated request" to the importing Member State to the effect that it does not have and cannot reasonably acquire facilities in which the waste could be disposed of in an environmentally sound manner.

    In the UK, the Government's interpretation of these provisions will be crucial to waste treatment and incineration businesses which are likely to see imports from industrialised countries dry up after 1994, leaving them to find overseas business primarily in the developing world.

  • Imports of waste to the EC for recovery: The provisions in this area are similar to those governing imports for disposal. However, in the case of import agreements made after the Regulation enters into force, such agreements can be made only "in exceptional cases for the recovery of specific waste" where a Member State deems them to be necessary to avoid any interruption of existing arrangements for waste treatment, up until the time the EC itself makes an agreement.

    The Regulation goes on to introduce new provisions covering all shipments of waste.

    Firstly, where an authorised shipment cannot be concluded in accordance with the terms of a consignment note or contract, the exporting country must ensure that the notifier returns the waste to its territory, unless it can be recovered or disposed in an alternative environmentally sound manner.

    Secondly, in illegal transactions for which the notifier is responsible, the exporting country must ensure that the waste is returned to its territory or, if this proves impracticable, is disposed of or recovered in an environmentally sound manner. Where the illegality is attributable to the consignee, the responsibility for ensuring its safe disposal will fall on the importing country. And where responsibility for illegal traffic cannot be imputed to either the consignee or notifier, the authorities concerned are to co-operate to ensure that the waste is safely disposed or recovered.

    Thirdly, all shipments of waste will be subject to the provision of a "financial guarantee or equivalent insurance" covering the costs of transport and disposal or recovery. Such guarantees will be returnable when a certificate of disposal or recovery is furnished by the consignee. This is a substantial innovation of the Regulation.

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