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Proposals that will change the way landfill operators fund the management and maintenance of landfill sites after they have closed have been announced by the Environment Agency. The proposals, which will ensure that landfill operators make cash available for the aftercare of their site from the first day of its operation, will alter the existing rules to reflect recent changes made by the EU Landfill Directive.
Landfill sites need to be managed long after they have been closed – some for up to 60 years – to ensure that they do not impact on the environment. The operator must pay for this. Under the current arrangements landfill operators only need to ensure that money for the aftercare/maintenance is available to the Environment Agency in the event that the business fails or the site is prematurely closed. This is normally done through agreements with banks or insurance companies who then cover the costs on the company‘‘s behalf.
Since 1994, UK law has required that licences for landfill sites can only be issued to someone who is ‘‘fit and proper‘‘ to hold a licence. One of the elements of fit and proper is that they must have made ‘‘financial provision sufficient to discharge the obligations of the licence‘‘. This requirement has been tightened by the implementation of the Landfill Regulations which give effect to the EU Landfill Directive.
Existing financial provision arrangements have been based on the assumption that the purpose of financial provision is to make a sum of money available to the Agency in the event that the licence holder defaults on their restoration and aftercare obligations in respect of the site.
Under the existing policy, many operators have chosen to meet the requirements by taking out a performance bond which will pay out a specified sum to the Agency if they fail to undertake the necessary closure and aftercare in respect of their site.
In future, the Environment Agency proposes to implement a policy which will make clear that financial provision is intended to be money set aside by the operator in order to enable them to finance their closure and aftercare responsibilities for their sites.
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