Employers urge government to stop waste reform
The Confederation of Estonian Employers, which represents the largest employers, today proposed to the government not to go ahead with the planned amendment to the Waste Act. The effects of the reform have not been analysed and instead of bringing the necessary changes in the field, it will lead to a number of problems.
“Employers have welcomed the waste reform initiative and believe that changes in the waste sector are much needed. Unfortunately, we have to admit today that the current package of legislative amendments is mainly contributing to restructuring the system, rather than to the original objective of the reform,” Hando Sutter, CEO of the Confederation of Employers, stressed in a letter to the government.“We believe that nothing will change in substance with regard to the original aim of the law – to increase the recycling of waste. As it stands, the waste reform offers only half the solution.”
There are five major challenges of waste reform.
1. Municipalisation worsens the competitive situation
The reform will worsen the competitive situation in the waste collection and treatment sector, as municipalities will be able to outsource services to their own companies (which is essentially the municipalisation of one sector) and this will lead to market distortions. This contradiction has been pointed out by the Competition Authority but ignored by the drafters.
2. The development of circular economy technologies is slowing down
Municipalisation solves basic waste management needs but stops market-driven development. Given Estonia’s size, there will not be sufficient waste streams to develop new circular economy technologies that require private sector investment and a stable waste stream.
3. The system must be reasonable for businesses
It is difficult for businesses to manage waste issues with multiple partners, which creates administrative burdens and reduces efficiency. It needs to be easier for businesses to exit from the organised waste management system. The Employers’ Confederation wants to continue discussions with the ministry to find mutually satisfactory solutions.
4. The waste reform’s responsible party is undefined
The waste reform does not clearly define who is responsible for meeting the recycling targets for municipal waste, leading to regulatory ambiguity and the need to recast the law. It also fails to take into account the trans-European reforms that force Estonia to comply with single market rules.
In the worst case, there will be duplication of regulation – for example, the proposed packaging law vs the directly applicable EU packaging regulation. We continue to see the ambition to over-regulate an already complex area regulated by the EU to a significantly higher degree at national level as problematic.
5. Impacts not sufficiently analysed
The effects of the reform, such as the level of waste levies and the principles for setting them, have not been sufficiently analysed. An in-depth impact analysis should be carried out before implementing the changes. If adopted in their current form, the legislative changes will harm Estonian packaging companies and the food industry by increasing administrative burdens and fees.
Producer responsibility and recovery organisations have estimated that the changes will lead to both an increase in the administrative burden and a multiplier increase in fees. It is incomprehensible why the producer responsibility system, which works well today, is being reformed in this way. The intention of the legislator may be to increase the power of local authorities, but it does not create added value for any of the parties involved.
Read the Employers’ Confederation’s comments on the letter to the government here (Word, downloadable).