Seanad debates

Thursday, 30 June 2016

Waste Disposal Charges: Statements

 

10:30 am

Photo of Gabrielle McFaddenGabrielle McFadden (Fine Gael)
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We will take statements on waste disposal charges. I propose that we allow the Minister to contribute first. Is that agreed? Agreed.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I did not expect to be back in the House discussing waste collection matters so soon but I am happy to hear people's views, share details on what I understand is happening and outline plans to address some of the issues.

In an open market, it is a matter for waste collectors to set charges at the level they consider to be competitive and in compliance with the requirements of environmental and other applicable legislation. As mentioned last week, the Government secured an agreement with all major waste collection companies to freeze charges so that customers would pay no more than they are currently paying for waste over the next 12 months. I assure Senators that this compromise was not lightly agreed and I sought assurances from the industry that it would abide by the principles. It should be noted that the vast majority of companies are abiding by the agreement and by the spirit of the agreement. They have kept customers on their existing price plans.

Earlier a Senator asked for the terms of the agreement, which are as follows. First, there was an agreed price freeze for 12 months until July 2017. Second, from January 2017 all customers will be able to see, through a dual-billing process, details on their bills in respect of the weight of waste of which they are disposing, the costs under the continuation of their current price plan and details of a comparative pay-by-weight charge. Third, customers would have an opportunity to choose to transition during this period to pay-by-weight charging or they can opt to remain on their current price plan.

There will be an intensive pubic awareness and promotional campaign by the Government that will help people understand the new system. It will explain how they can change their waste management behaviour and better manage their waste costs under a pay-by-weight system.

A full waste allowance was agreed with the industry for used adult incontinence wear. The issue affects approximately 60,000 families and generates in the region of 39,000 tonnes of waste. I think I said 40,000 tonnes of waste when I was here last but it is certainly around that figure.

At the end of the 12-month transition period that will conclude in July 2017, the Government will review the operation of the pay-by-weight scheme, including the effectiveness of the transition process. It will make decisions regarding the scheme's further roll out, regulation and oversight. In fact, we have given a commitment to examine the functioning of the entire waste market as part of the review process, which is something a number of Senators have requested.

While the majority of those in the industry have clearly honoured the agreement, there appear to be some instances of divergence from the terms, or if not the terms, certainly the spirit, of what was agreed. I consider that unacceptable. Anything that causes confusion on this issue is unhelpful and counterproductive to what was agreed last week. I have publicly expressed dissatisfaction with the decision of a particular company to require companies to opt out of pay-by-weight, as opposed to being offered the opportunity to opt in. I signalled in this House that the operation of the price freeze by the industry would be closely monitored. I said that if there was evidence of the agreement being breached, I would look at whether legislation is necessary to enforce it. If we find it difficult or impossible to get agreement on compliance across a range of providers, that is likely to influence the review of the functioning of this industry and this market. This could give rise to an examination of the need for a regulator to ensure we have absolute clarity in terms of predicted behaviour, charging systems and the parameters within which the providers operate. I have mandated senior officials from my Department to meet representatives of the waste industry as a matter of urgency early next week. I expect several issues concerning the consistent implementation of the agreement to be raised at that meeting. It will be made clear to the personnel from the waste industry that if a fair and reasonable approach is not being delivered, I will be forced to take further steps to ensure the agreement is honoured.

Issues seem to have arisen for some customers who are moving from refuse bags to bin services. We spoke about this briefly before the formal statements started. Notwithstanding the difficulties associated with trying to accommodate customers who use bags, and in respect of whom the collector has no data on last year's weights or charges, I am confident that a reasonable and fair solution to this issue can be found. As Deputy Ó Clochartaigh outlined to me, people in some parts of County Galway have their waste collected in bags that they purchase from shops. Under this bag tag system, refuse bags are collected sporadically, which means the same charging data might not be available in respect of certain customers and, therefore, it may be more difficult to agree a charge freeze in the cases of people who are having bags collected on the basis of need. I accept that there may be an issue here. We will look at how best we can deal with it.

It is important to say that waste collection in the form of using bags can be problematic. It is not the ideal way for refuse to be left on the side of a street or outside a home. Littering caused by ripped bags is an issue. Health and safety issues can arise for collectors when sharp objects are placed in bags. Litter can be caused by fly-tipping on streets and in other areas where bag collections take place. Little or no segregation of recyclable or food waste takes place, for the most part, when people put all their waste in a black bag or a bag of another colour. The use of bags leads to an inability to gather data for the purposes of statistical information and environmental reporting on the waste that is collected. The whole point of what we are trying to do with regard to pay-by-weight is to put weighing equipment on the refuse trucks to make sure we get clear calibration and consistency around weighing. We need to understand what volume or weight of waste people are producing. That is the idea in theory, but it is sometimes more complicated in practice. People who live down long laneways or boreens that trucks cannot use have to carry their waste 200 or 300 yards. It is very difficult to roll a wheelie bin for up to half a kilometre. Some people put them in the back of the car. Practical responses are needed, depending on where people live. My understanding from Connemara is that some practical difficulties are causing problems now. We need to look at that. I am aware of at least one local authority that has already introduced bylaws on foot of such problematic issues to remove from households the option of presenting household waste in bags for collection. I have spoken about the issues in terms of the use of bags.

With those issues in mind, and in the context of the planned introduction of pay-by-weight charging, which cannot easily be applied to bags, it was decided in April 2015 to phase out the use of bags for household waste collection where wheelie bins could be accommodated. That is the important issue. We are trying to switch over to wheelie bins where possible, but there are instances in which they cannot be accommodated. I refer, for example, to apartment complexes. The complex where I stay when I am in Dublin does not have enough wheelie bins for all of the tenants. This is an obvious issue. My Department, in consultation with the local authorities, has set criteria to be applied nationally with a view to the phasing out of bags in all areas other than those where it is not practical to use wheelie bins. When my officials meet representatives of the industry next week, they will discuss how to cater for those who have moved from bags to bins in the context of the current agreement.

I know this was a big issue in the Seanad today. To avoid dividing the House on the matter, I was happy to attend and try to give Senators an update. As I have said, I have asked my senior officials to meet representatives of the industry next week to tease out some of these issues. I have to say the agreement we had with the industry is being implemented, by and large. Many of the big operators have written to all their customers to inform them that a charge freeze has been agreed and that their payment plan for this year will be the same as it was last year. There are issues in areas where this is not happening. Problems are also arising where people are being asked to move from bags to wheelie bins. Some of these problems are accompanied by an increase in the standing charge. We will have a look at such issues and see whether we can resolve them as soon as possible by talking to the industry. The meeting in question should happen on Monday or Tuesday of next week.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I thank the Minister. I have to say I am a little confused. I spoke to the Minister about this issue last week. I have three or four questions for him and I want him to answer them for me. I thank him for coming in to clarify these matters.

The Minister said last week that it had been agreed that there would be a 12-month freeze from 1 July 2016 to 1 July 2017. He said there would be an extensive public awareness, information and promotion campaign to make people aware of this and to ensure they get value for money. He said that under a system which is to be rolled out from January and put in place for a few months, people will have a dual pricing bill. This will enable them to understand the differences and, hopefully, select the cheaper option.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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That will be in place from next January.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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Yes. It will be available in January 2017. I am trying to get my understanding of these issues confirmed. I understand that as part of these arrangements, the transitional 12-month period for the operation of the pay-by-weight system and of the wider waste market will be reviewed. I also understand that when a decision is being made on the arrangements beyond 1 July 2017, the intention will be to keep the operation of the price freeze under review, with consideration being given to further legislation and intervention if necessary. I know this applies to the following year. That is something else we talked about.

I ask the Minister to explore the option of revocation in one particular case. As Senators will be aware, people who avail of the services of a certain waste management provider have been told they have to pay charges under the new system. This applies in particular to new customers of this provider. I do not know whether I can mention the name of the provider in question. I want the Minister to clarify that for me. It seems that new customers of this provider could have to pay the full pay-by-weight charge. I need to get that clarified.

Customers who want to stay on the current plan are not being given enough information. They have been told they have to let the provider know if they want to stay on the current plan. We have been told that all this information is coming on board. I need to get clarification on the freeze that is being introduced from tomorrow, 1 July. As a result of media hype, the provider in question has announced that it intends to send letters to its customers, who will have a month to say whether they want to stay on the original plan. This applies to customers who have been on the plan in question and not to new customers. I believe other providers are following suit down the same road.

Reasonable and honest people who have been paying their charges without delay or complaint are confused and angry. They are disappointed by the Government's inaction. The Minister needs to be proactive rather than reactive. Perhaps he should listen to what the people are saying before their complaints reach "Liveline". Everybody is getting their information from "Liveline". It has been phenomenal.

I have to say that as a Senator, I was delighted with what the Minister was doing last week. People were happy with the decision to freeze pay-by-weight charges for a year. I think there was agreement here that this was what people wanted. Of course we were looking for a waiver scheme under special circumstances. We need answers. I felt that the biggest issue was the lack of information.People automatically thought they would not be affected by any pay-by-weight system for one year. I know the Minister will work on this but I need answers and I need to go back to the people that I represent, as the Minister also represents his constituents, and tell them that there will not be hikes and that the Minister will give a commitment to that effect.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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Gabhaim mo bhuíochas leis an Aire as teacht isteach. I appreciate the conciliatory nature of the Minister's presentation and I appreciate him coming to the House to discuss the matter. This is not just something we are trying to cause trouble over. It is a serious issue that has been raised with us and I did make these points in the debate that was previously held, points which were possibly missed during that debate.

There are issues around some of the ways the companies are acting in this regard. I believe that the Minister was probably not told the full truth by the companies when he met with them with the Minister of State, Deputy Seán Kyne, going by comments he has made in the media.

We have an issue around policy of the privatisation of bin services, etc., and the way the Minister is moving on the statutory instrument. I will not go into those issues at the moment. However, I will discuss the specific implementation issues that will kick in from tomorrow, 1 July, as have been related to me. Existing customers with the companies are having a pay freeze. Therefore, a person who is already with Barna Recycling in my area is going to continue with that company, and that charge is frozen. The issue arises for the 37% of people in my area who are not registered with Barna Recycling but who may have been customers of Barna Recycling. The Minister's assertion that nobody is going to pay more than they are currently paying provides an anomaly for those who use bags or the people who have disposed of their waste in a proper manner.

A number of cases have come up. For example, a pensioner on Raidió na Gaeltachta this morning explained that she had been recycling all her life. She lives alone, buys a green bag very rarely because she recycles most of what she has and she buys a blue bag once a month. She was managing but she feels that she is now being penalised. She went to the shop to try to buy her bags as usual. She could not get the bags and was told that she had to telephone Barna Recycling. She telephoned the company and was told that as she was a new customer, even though she has been buying the bags for 20 years, she had to buy the bags in bulk at a minimum price of €60. She is on a pension and she says that she cannot afford to pay that. She was also told that she would have to pay the standing charge. The standing charge being imposed in our area is between €204 to €238 per annum. It is based on distance depending on which area a person lives in. She explained on the radio that she was a good recycler all her life she is now being penalised and being moved to a situation where she is going to be paying a couple of hundred euro more per year than she would have been previously.

Another call came from a couple who have two young children who are still in nappies. That were using the bag system because their home is more than 100 m away from the pick-up point where the truck would be passing. The family did their calculations and estimated they would be paying €500 extra a year because of the pay-by-weight system and they are very concerned about that.

There is huge concern that there is going to be a lot of dumping because of this issue and because the measure is kicking in tomorrow and the bags are no longer available in the shops. There is a huge issue there. Perhaps the Minister will go back and ask the companies who are selling the bags to the shops to maintain that system for at least the next year while the freeze on charges is in place. The Minister made the point that it is impossible to know how many bags people have bought over the year. Now is the time to start monitoring that practice so that over the next year he will have a proper estimate of how much refuse each of those people are generating. The Minister might also consider waiving the registration charge for those people who can prove that they were customers, albeit buying the service through the local shop as opposed to buying directly from the company. That would maintain the scenario that the Minister has said he wishes to see, which is nobody paying any extra than they currently do.

With regard to the waste bag system will the Minister indicate how the waste allowance system will work for persons who use bags? For example if a person has a medical condition and has medical waste they need to dispose of will the Minister clarify that situation for those people?

Reference was made to the opt-out scenario from Greyhound. The Minister has indicated that it is not acceptable that people should not be told that it is an opt-out rather than opt-in. In some areas, even though it is an open market, there is a monopoly scenario. There are some geographic areas where there is only one company operating and there is no choice. For example, in our own area in Galway, and I have cited this on a number of occasions, the standing charge by Barna Recycling in the Connemara area is between €204 to €238. The same company charges €80 for the same service in Leitrim, which is of very similar geography. There is something very wrong with that.

We are also being told that when people do register with companies they are going to have to put money into banks and into the company's bank account in advance before they get any services. This was raised with the director of services at Galway County Council on Monday and he said he has received no direction whatsoever from the Department. They are still awaiting direction from the Minister's Department on how the system is working. Will the Minister clarify that situation as this is what we have been told by the director of services?

The Minister needs to go back and play a bit more hardball with the waste companies. There has been some illegal dumping but there are people who maintain and manage their own waste disposal. They recycle and then bring any waste they have into places like Barna Recycling. We need to look how those people can be dealt with so they are not paying any extra. I appreciate the Minister has come to the House to sort this problem. We want to help the Minister sort it and if we see any more issues we will bring them to him. However, because this measure is taking effect from tomorrow, people need certainty today that the system they have been working with up to now will continue from tomorrow at least, so there is no disparity of treatment across the board.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I call on Senator Grace O'Sullivan but the Senator is not offering to speak. Senator Denis Landy has five minutes.

Photo of Denis LandyDenis Landy (Labour)
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I thank the Minister for attending the House this evening. Last week he set out his agenda on this issue in a fair and honest way in the House and we had a broad discussion. Many points were made and the Minister took them on board. The key point that I took from the discussion was that he had set out an agreement that he was going to follow through with contractors and service providers. I believe he will do that.

I fully respect Senator Murnane O'Connor's comments in regard to what is happening in Galway. However, it is like other things in this country. There are those who will blaggard the system and will try to do things, particularly to the elderly in this situation, which is wrong and unfair. Those people need to be called out and be told clearly that the representative body of the waste management companies have entered into an agreement with the Minister, as I understand, and that needs to be honoured. I am happy to allow the Minister to continue to engage in these discussions and to make the situation very clear to them.

There are a number of things that could be done. All waste management companies require to be re-licensed at some period in the cycle. That is a big stick and if people are doing what has been said here, then it should be stopped and it will be stopped. I am confident that the Minister will do that.

While I may not agree with all of the approach and the generality, on this issue specifically I commend the Minister for what he has done. I hope that when he engages further with these companies he will call them to boot and they will heel. The items that were raised and highlighted on the floor of the Seanad will be dealt with.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I call on the Minister to make his concluding remarks.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I thank the Senators for raising these issues. I thank them also for the tone of the debate. This seems much better than the last time we had a discussion on these issues when it was much more adversarial. It becomes difficult to get to the root of things in that kind of environment.

When we made an agreement with the industry we had a conversation around how new customers would be treated. To be fair to the industry, one can have a situation where new customers would come to get a service - from an operator new to them - and they would have the payment plans that other customers would have been given in the previous year. Some of the operators are probably now being forced to charge people at a loss to the company because they have signed up to charging no more than the last bill. There are some companies that are, for legitimate historical reasons, still charging at less than what is costs to provide the service. Therefore, if a new customer comes in to that environment one cannot really expect a company to offer them a charging system at below cost.

There was always the issue around how new customers would be treated. That is why I was insistent that people who were currently paying, and if they stay with their current provider, would not be charged extra.Clearly, an issue arises for people who were having bags collected, in the case of Barna Recycling, but who would not have been considered customers of Barna Recycling because they were only being picked up every now and again whenever the bags were purchased. We must try to deal with that issue with the company involved. I cannot force the company to change but we can certainly try to influence that behaviour to ensure companies are acting in the spirit of the agreement made as opposed to trying to look for ways to get around it.

Likewise, in the case of a large operator in Dublin, my understanding from it was that before it was required to do it on 1 January it would offer an opt-in option to customers for pay-by-weight long before that date because it has the infrastructure to do that now. That company will say it will give customers the option from 1 July if they want it but what I had not expected was that customers who had agreed to opt in to pay-by-weight would now have to opt out if they choose to get out of it. There is a big difference between the status quoremaining as a frozen charge and having to opt in to get back to that situation because not everybody will read the letters that come in and so on. The letter to customers is very clear, but not everybody will be in a position to study the options and make a decision. We are speaking to the different customers

The upside is that the majority of companies are abiding by what was agreed. There are isolated cases that have been very vocal today, understandably, because they are concerned, but by and large the concern I was hearing from people in many parts of the country, and particularly in different parts of the capital city, about the transition to pay-by-weight and the potential cost implications for families is not happening now in most cases. We will meet the industry representative body. If some companies are behaving in a way they think is fair but we think is not, we need to talk through those issues and try to resolve them.

As to whether there will be hikes in charges, there will not. The people who are looking at potential hikes in charges are new customers to companies who are being put straight onto the pay-by-weight system. They would not have been on it previously and therefore they are seeing a significant potential increase in their charge. We need to try to address that with the companies, especially if they are in an area where there is no other option. If the Senator compares the same company operating in Leitrim and Galway, she might find that there is competition in one area where people have other options.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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That is the point of having a competitive market.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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If someone does not like the price package they are being offered by one service provider, they can go to another one. The thinking behind having an open, competitive market is that we would encourage companies to compete with each other and offer different solutions, collection rotas and pricing models. We were trying to layer on top of that a requirement that everybody would have to factor in a pay-by-weight model as part of that pricing model. We will phase that in over time rather than mandate it.

I dealt with the issue of new customers and the freeze, which is a tricky issue. Companies in this industry get a very bad name. They frequently get beaten up, so to speak, in this House and in the other House. Some of the companies have acted honourably in terms of what I have asked of them. We must not forget that we legislated for the introduction of pay-by-weight. They have invested heavily in that to be able to make it happen. Some of them were not ready, but many of them were ready. Given the understandable kickback due to the lack of preparation in terms of communication to ready households for this change, we have essentially put it off for a year. We now have a plan to try to improve that communication significantly during that period.

It is important to state that many in the industry have responded to what I have asked them to do. They will reduce their margins in terms of what they otherwise would have been making as a result of that and if there are some who have not behaved in the same spirit, we need to try to deal with that. This is a very competitive, aggressive industry in terms of how it operates, and we should not fool ourselves in this regard.

In terms of customers only being offered pay-by-weight, and the Senator seems to be suggesting there is no other option for customers, I want to be clear. There is no mandated requirement now for any company to have to introduce pay-by-weight and nothing else-----

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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This is not for bags, is it?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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-----but there is no requirement on them not to offer pay-by-weight either. Many companies have been collecting on the basis of pay-by-weight for years. Approximately 20% of households pay by weight. They are happy to do it, and it works very well. They segregate their waste and so on. We are not asking those companies to offer some kind of standing charge system without pay-by-weight in terms of a dual pricing model. It is important to say that we cannot ask some companies that operate on the basis of pay-by-weight to wind the clock back on that, but companies which have not offered pay-by-weight and which now must offer that option after 1 January are in a different category.

In terms of the incontinent wear waste, which was the subject of a negotiation that was going on between my Department and the industry before this kicked off as a political issue, the industry showed some foresight in this regard. We cannot have a situation, for obvious reasons, where people who have a significant waste linked with a medical condition, a disability or the fact that they may be incontinent are punished through an increased charge on the back of a pay-by-weight system. That makes no sense on any level. In terms of what will happen, the industry has committed to agreeing an estimate on the basis of the allocation of incontinent wear from the Health Service Executive. Approximately 65 million individual pads are provided to about 60,000 families, and on the basis of that and on the basis of an average weight of that wear when it is waste, there will be an allowance on the charge for that volume of weight which, if we were to have pay-by-weight on the basis of 30 cent to 35 cent a kg, would be in excess of €12 million of potential retail charges. It is about €3 million of landfill charges for the industry also, so we are not talking about a small amount of waste. We have agreement from the industry that it will provide that allowance by working with the HSE. Of course, data protection issues arise in terms of not giving out somebody's medical details but simply the number of pads allocated.

On the issue of bags sold in shops, I will come back to the Senator on that. I do not know whether that is covered by any new conditions of licensing regulation.

When we have a clearer picture next week I might write to the people who have been raising this issue to outline the results of the meetings we have had.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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When is it proposed to sit again?

Photo of Ray ButlerRay Butler (Fine Gael)
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Next Tuesday. Could I make a comment on the issue?

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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No. The Minister has concluded. Sorry about that.

The Seanad adjourned at 6.20 p.m. until 2.30 p.m. on Tuesday, 5 July 2016.