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The advent of ‘OfWaste’: how market regulation could transform the resources sector

Delivering the Kit Strange Memorial Lecture earlier this year, I stressed the need to continue the professionalisation of the resources industry.  I want the industry I have been part of for over 20 years to take the lead on high quality recycling, the circular economy and tackling waste crime.

Iain Gulland | 12 May 15

Its clear things are changing.  Key industry players are stepping out of the old ‘waste’ coat and into the new ‘resources’ suit.  But with change comes challenges – how should the new suit be worn?  I’ve always contended that it should be more than a quick name change: the industry should see this as an opportunity to not only divest itself of some old reputational issues– but to embrace a new style more akin to a professional utility.

Ian McAulay, the Chief Executive of Viridor, embraced this vision of being ‘the new utility sector’ at our Scottish Resources Conference last year and he re-emphasised this in his speech at a CoSLA event in March. Ian’s well-placed to make such assertions.  With previous experience working in the water industry under his belt, his take on the potential for the resources industry to make such a transition, and the benefits it would bring, is well-grounded.  

The need for such ambition is also reflected in the FCC Environment report, from February, which suggests that businesses don’t really place much value on their waste services.  We need to change that.  We need to banish the outmoded impressions that householders and businesses still arguably hold towards their waste services. If we are to embody Scotland’s next utility sector; or if - as SITA’s David Palmer Jones has said - we are to see the industry ‘come out from behind the garages’, then we need to do something radical. 

The suggestion I put forward in the Kit Strange Memorial Lecture, which has also recently been reported on in Resource magazine, is for a market regulator.  Let’s call it ‘OfWaste’ at present, as this entity could have similar roles to those of Ofcom or Ofgem in their respective industries. 

I see two clear benefits of this proposal.  Firstly, a regulator like ‘OfWaste’ could drive improvement in systems and infrastructure.  We can learn much from other utilities.  A market regulator could drive investment in the resources ‘grid’, similar to the electricity grid or the water grid, where we have controlled management and supply of resources within an established and consistent framework.

A second benefit is around the expectations that customers would have of the industry.  As well as moving the industry forward, ‘OfWaste’ could help make real inroads in improving the relationship between customer and the service.  A well- regulated utility will offer transparency in pricing and a consistent standard of performance that all operators would have to achieve.  It would also go a long way to excluding illegal operators, and this system would also be able to enforce, for example, the compulsory use of EDOC (Electronic Duty of Care) bringing greater transparency in real time.

Such regulation of the market place could give confidence to legitimate operators, protecting their interests and those of their customers whilst also getting best value for the wider resource economy.

This would not supersede the role of the Environment Agencies of the UK. Their role in regulating the environmental impact of the resource industry is and will continue to be an important part of the future. Whether or not their role should expand to encompass more market regulation or whether a new body entirely is required would be a decision for another day. Further questions might arise on whether we would need four national frameworks or one to cover the whole of the UK.

Regardless of the apparent obstacles that many will see from this idea, few can deny the need for the industry to evolve – through seeing its future in the service sector, rather than being wholly dependent on the value of the material it handles. I believe that the transition to the circular economy will see businesses who supply goods retaining the value of the materials and products, rather than simply providing a market price in the hope they can buy them back sometime down the line. The relationship between business and the resource industry will therefore change but will be clearly based on customer loyalty and a greater appreciation for the work and service being delivered both up and down the supply chain.

This for me is not about regulation for regulation’s sake. This is about the maturation of an industry which I have been part of for over two decades, which is fighting to move forward. But it’s also about developing a more meaningful customer relationship and moving towards the circular economy we all know is the next big thing. 

In my mind, this is about leadership – and grasping a clear opportunity for the industry itself to take ownership of its future. Becoming the new utility sector with the appropriate level of regulatory rigour will ensure a prosperous and sustainable future for the resource industry. It will also define not only how our customers see us, but how we see ourselves.  More importantly perhaps it will position resources firmly on the centre stage, which will attract investment and drive innovation, creating the right conditions for resource management to become the cornerstone of the circular economy in the years to come.  

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