Due to a large number of bankruptcies at waste companies, provinces and municipalities are faced with high costs. If no one is responsible anymore for clearing debris and remediating land, the bill will go to the taxpayer.
And that can add up considerably, according to an inventory by platform Investico, together with The Green Amsterdammer, De Limburger and EenVandaag. Since 2015, bankrupt waste companies have jointly left behind at least 15.9 million euros in costs for provinces and municipalities, and more than 4.2 million in outstanding bills for the tax authorities and UWV.
‘Causer gets away with it’
It is not new, the involvement of the waste sector in countless large and small environmental scandals. Society could then pay for hundreds of millions in damage. Filing for bankruptcy, as has been happening more and more in recent years, fits in this pattern.
If a waste company is in violation and, for example, remediation needs to be carried out, bankruptcy is an easy solution to its problem, Daan Prevoo explains. “If I am bankrupt, there is nothing to get in the hands of the trustee, he will have to arrange it. The perpetrator will get away with it.” The former deputy at the province of Limburg was faced with three bankruptcies whereby the social costs were high.
Million debt to the province
For example, Prevoo closed the John Peeters waste processing company in Maastricht in 2015, when it turned out that the company had much more waste lying around than permitted – with a high fire risk as a result. The province installed 24-hour firefighters to be on the safe side.
Six months later, the company went bankrupt and the province was left with 2.3 million euros in debt. “That damage could have been even higher, because if it had caught fire, we would have had to extinguish it for days and close the A2, for example.”
Not always maintained
According to the Interprovincial Consultation, one cause of the problem lies in enforcement. The joint lobby organization of the provinces conducted research into waste companies 2 years ago, and saw that it is not always possible to enforce it properly, because this can actually cause companies to fail.
“If a company takes in more waste than is licensed and / or the storage does not meet the safety requirements, you have to enforce it”, the researchers explain. The problem is that ‘companies that are economically’ marginal ‘cannot cope with this. “They can then get into trouble, which means that you as a government will be faced with the cleaning costs. And so enforcement is not always done.”
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Smaller waste companies regularly flout the rules. This was also the case for the company that sat next to Hugo Omen’s metal processing company. Illegal acid from there leaked into Hugo’s shed. The neighbor did not pay for the damage.
Fines not a solution
Daan Prevoo recognizes this and sees that as a government, if a supervisor establishes that there has been a violation, you have the legal option to impose a penalty. The offender is then given the opportunity to respond to this within a ‘reasonable period of time’, and waste companies make good use of this. “With that the offender buys time. Before you can collect the penalty, it takes a while. They are often given an extension to divert money and prepare for bankruptcy.
As far as Daan Prevoo is concerned, fining is not always the solution. “Giving fines or locking the tent is not the solution, you will be left with the mess.”
Insurers are withdrawing
Another negative side effect is that insurers are withdrawing from the enormous risks in the ever-growing waste market. According to the Dutch Association of Insurers, there is now only one Dutch insurer that is willing to take out new policies. And that in turn has consequences for municipalities or provinces. Because without insurance, companies themselves are responsible for the damage in the event of a fire, but in the event of bankruptcy, the municipality or province may pay for the remaining costs. According to the Dutch Association of Insurers, companies are doing too little to reduce risks.
The Interprovincial Consultation therefore raised the alarm about the financial risks at waste companies 2 years ago. Problems should be avoided by reintroducing a ‘financial guarantee’. Such a ‘financial security’ is a kind of guarantee that companies should pay when they enter the market.
Holes in the law
Prevoo also sees too much room for the polluter to evade legislation and regulations. “The idea that the polluter pays does not always hold true, if there are sufficient gaps in legislation and regulations. There is now too much room, which means there is too much chance of malicious business operations.”
He sees another solution against the evasion of regulations and enforcement of enforcement in an integrity test. “Subject administrators to an integrity test, as in the hospitality industry. This is also a sector that is vulnerable to money laundering, for example. This way the crooks are immediately picked out.”
Response from the Ministry of Infrastructure and Water Management
The Ministry of Infrastructure and Water Management has said in a response that it is looking into whether financial security can be built into the new environmental law. This must be entered on January 1, 2022.
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Small waste companies often flout the rules, governments not only saddle up a mountain of waste, but also a hefty bill for cleaning up.