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									                           LGA Waste Committee

                     Possible Establishment of
              Regional Local Government Waste Groups

                                Options Paper
                                 August 2003

Introduction
With the proposed introduction of Zero Waste SA as a new body to facilitate waste
reforms throughout South Australia, Councils in this state have an opportunity to
review their current approach to waste matters and determine the best way to
manage these issues into the future.

Fundamental questions relating to the role of Local Government in waste and
resource management and the directions the sector wishes to pursue for the future
are firmly on the agenda for consideration. The answers to these questions will not
only guide Councils in their operations relating to waste management, but will also
inform the proposed State Waste Strategy, to be prepared by Zero Waste SA.

One of the options available to Councils is that of the possible voluntary
establishment of Regional Local Government Waste Groups. With a number of
regions already pursuing this option on a voluntary basis, a determination of
possible roles and an assessment of the pros and cons, including the various
mechanisms to formalise these arrangements, is required.

It is anticipated that this assessment will not only be useful to those regions
currently formulating regional waste strategies and structures, but also to those
considering this course of action.

This Options Paper is structured as follows:
   - emerging challenges in waste and resource management;
   - potential roles and functions of a regional body;
   - pros and cons of a regional approach;
   - insights from past initiatives in South Australia and interstate (including in
      particular Victoria and New South Wales);
   - current initiatives within South Australia; and
   - structural options for the establishment of such groups.

In addition, a sample checklist is provided as an Appendix to this paper to assist
Councils in determining whether or not there will be value for them in pursuing a
regional approach to waste issues.




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                                      LGA 3594
Emerging challenges in waste and resource management
There is a range of challenges emerging in the field of waste and resource
management that are highlighting the need for reforms. These include:

Economic challenges
- Cost of landfill upgrades and maintenance
- Economies of scale (e.g. recycling or collection contracts)

Environmental challenges
- Opportunity to reduce waste to landfill
- Reduce demand on natural resources for products (through recycling)

Social challenges
- Community demand for recycling programs
- Community demand for consistent services across Council boundaries

Legal challenges
- Increasing regulatory requirements (e.g. landfills)
- Potential for new statutory requirements (e.g. Environment Protection (Waste)
   Policy)

In order to meet these challenges Councils and others in the community will need
to be clear about their role in waste and resource management, and the types of
reforms they can contribute to in a sustainable manner. In some areas, the
formation of Regional Local Government Waste Groups may contribute positively
to this reform process.

Potential roles and functions of regional bodies
There is a broad range of possible roles for regional Local Government Waste
Groups. These include:

   -   facilitating the education of stakeholders on their role in waste and resource
       recovery;
   -   regional planning for the progressive implementation of waste reforms;
   -   facilitation of waste reforms on a regional basis (including for example
       establishing a cooperative approach with key stakeholders such as service
       providers and the private sector);
   -   management of waste-related contracts (such as collection/sorting
       contracts) on a regional basis; and
   -   management of one or a number of regional waste management facilities
       (including landfills, transfer stations and resource recovery facilities) or
       facilitation of the provision of these facilities through partnerships with the
       private sector.

These can be considered as a spectrum of intervention, as illustrated in the figure
below. The determinations of Councils regarding where in this spectrum they
choose to locate themselves will dictate, to a large extent, the nature of structural
arrangements that will be required and appropriate.
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                                                                  Own/manage
                                       Facilitation
               Education




                                                                  Facilities
                                                      Regional
                                                      contracts
                           Planning
   Nil




Figure One: Regional Local Government Waste Groups – Spectrum of Intervention

These roles should not be viewed as cumulative. That is, it is certainly possible to
enter into regional arrangements for the ownership/management of a waste facility
without necessarily supporting a regional waste education program or regionalising
contracts for kerbside service delivery, and vice versa.

Pros and cons of a regional approach
There is no legislation in South Australia, either existing or proposed, that compels
Councils to adopt a regional approach to waste issues. This is in direct contrast
with the approach taken within Victoria and, at one time, in New South Wales.

The choice regarding the possible establishment of regional waste bodies is,
therefore, an entirely free choice by Councils. This decision should, therefore, be
entirely based on the consideration of the relative costs and benefits to Councils
and the community of adopting a regional approach versus going it alone or
working in a less formal way with other Councils and industry groups.

It is to be expected that the balance of pros and cons will be very different in
various parts of the state. What works in one region may not be required in
another. Additionally, what is achievable in some areas may be beyond the reach
of others. There is no ‘one size fits all’.

As a result, it is to be expected that the arrangements put in place across the state
will vary in their scale, roles, structure and composition. It is possible that this
assessment will yield the view, in some areas, that the establishment of a regional
body will not deliver significant benefits and would, therefore, constitute an
inefficient use of resources.

In other areas, it may be appropriate for a Council to participate in more than one
regional group, with each group serving a different purpose. This is the case with
some Councils now.

The general pros and cons of adopting a regional approach are listed below:
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Pros
   - delivers a broader, regional perspective on waste and resource
     management issues
   - allows Councils to deal with issues that benefit from a broader rather than a
     single Council perspective more effectively
   - promotes a consistent and cooperative approach between neighbouring
     Councils
   - places decisions relating to operational issues (e.g. landfill management)
     into a broader, strategic context
   - provides a means for prioritising local industry development (e.g. compost
     production and sales within the region)
   - may attract a higher level of support from funding bodies
   - potential to deliver lower unit costs for recycling and depot management
     (economies of scale)
   - provides a framework to facilitate the introduction of resource recovery
     infrastructure
   - properly governed it will still enable individual Councils to have adequate
     input to decision making;
   - allows individual Councils to concentrate on other issues with a specialist
     body (on which constituent Councils have representation) to manage waste
     and resource management issues;
   - raises the profile of regional waste issues and provides a united platform
     from which to lobby for reforms (e.g. from the State Government or key
     industry groups)


Cons
  - may highlight points of difference amongst individual Councils;
  - requires a commitment of resources (both human and financial during the
     establishment phase and thereafter)
  - may not be suited to solving the core issues within a given region
  - may highlight some issues that are beyond the scope of the region to solve
     (e.g. those relying on development of external markets)
  - if not established correctly, may duplicate existing structures
  - could raise the level of expectation from others (including the community)
     regarding the reforms that can be delivered by Local Government beyond
     what is reasonable and practical

Ultimately, those considering the possibility of forming a regional Local
Government waste group will need to answer the following question:

Could a regional approach assist us to meet the emerging challenges and achieve
the changes needed in this region?

If the answer to the above question is ‘yes’, further consideration of the possible
features of this approach will be required. It is important that these features closely
match the needs and core issues identified by Councils for reform.
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                  What are the core issues and needs?
           These should be identified by the group as a whole and
           may benefit from the input of others (e.g. local industry)

           Will a regional approach help to meet these needs?
                             (See Appendix A)

                    Yes                                 No
         Pursue a regional approach              Pursue alternatives


                        Appoint a Working Group
            This group will guide the development of issues and
             options in consultation with the region as a whole

              Work through issues and proposed solutions
          This is often done through the development of a Regional
                                Waste Strategy


                What is required to deliver these solutions?
               This will include the allocation of responsibility for
          implementing the regional strategy recommendations and
            of human and financial resources to support this work.


                     Is a regional structure required?


                     Yes                                No


              What role and functions will this body have?
               To closely match what the body is to achieve.


          What structure and composition will this body have?
                 To closely match the role and functions.


Figure Two: Decision-making flow-chart for consideration and development of a
regional approach to waste issues.




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                                      LGA 3594
Past initiatives in South Australia and interstate
Regional structures to deal with waste and resource management issues are not a
new concept and there have been many initiatives of this nature over time, both
within South Australia and interstate.

New South Wales and Victoria
There has been much discussion interstate about the value of regional structures
to assist Councils in managing waste. Regional models were made compulsory
within both NSW and Victoria over the last decade, with a view to encouraging
Councils to regionalise waste contracts and services and deliver economies of
scale.

These experiments in mandatory regional approaches have had mixed results. In
New South Wales the regions were disbanded and a new statewide model,
Resource NSW, introduced in 2002. While regional structures remain in some
areas in an informal voluntary fashion, the emphasis in NSW is now on a central
structure providing support to Councils and the community.

While regions continue to be compulsory in Victoria, a recent review by
EcoRecycle Victoria has resulted in their structure being questioned and their roles
and responsibilities re-defined. These groups now have responsibility to plan for
the management of municipal waste only, with the state body taking responsibility
for commercial and industrial waste.

Country South Australia
Within South Australia, past initiatives in country areas include the following1:

    -   South East Waste Management Strategy
    -   Riverland Regional Waste and Recycling Strategy Plan
    -   Fleurieu Regional Waste Management Strategy

There have also been a number of arrangements made within the metropolitan
area, most of which are ongoing and will be addressed in the following section.

The three Regional Recycling Strategies listed above were produced in the mid
1990s in response to a statewide direction set by the then Recycle 2000 and the
ANZECC target of a 50% reduction in waste going to landfill to be achieved by the
year 2000.

With the benefit of funding supplied by Recycle 2000, these plans were produced
as tools to hasten the introduction of waste reforms in country areas, with a
particular focus on the possible introduction of resource recovery and recycling
initiatives.



1
 There have also been a number of regional arrangements made within the metropolitan area, most of which
are ongoing and will be addressed in the following section.

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The LGA conducted a brief review of the effectiveness of these strategies in early
2002 to identify the strengths and weaknesses of the approaches taken.

In broad terms, the results of this review were as follows:

Strengths
   - All three strategies took a broad view of waste reforms, including both
      municipal and commercial/industrial waste streams and identified
      mechanisms that could be applied to deal with these;
   -   All three strategies focused on the need to review current arrangements for
       landfills and undertook an initial assessment of the economics of landfill
       rationalisation and regionalisation;
   -   All three strategies undertook a simple audit of waste streams dealt with in
       their regions, and the resource recovery opportunities available to deal with
       several of these.
Weaknesses
  - While some consideration was given to the possible need for regional
     structures to be put in place to oversee the implementation of the
     recommendations of the plans, these arrangements were not formalised;
   -   Issues relating to resource limitations of constituent Councils were identified
       in the plans, in a general sense, but were not followed up. As a result,
       neither budgets nor human resources were secured to implement the plans
       in a comprehensive manner;
   -   The need to make strong links between the plan and the intended directions
       of the EPA and other stakeholders were only partially addressed. This
       resulted in an uneven result with regard to the number of recommendations
       relating to landfill management, for example. Where positive results were
       achieved in this area they were not generally viewed as attributable to the
       regional strategies but rather to unrelated initiatives of individual Councils
       and the EPA.

   Given these observations, it is suggested that any future attempts to introduce
   waste reforms at the regional level should ensure the following essential
   elements are addressed, among others:

   a) formal structural arrangements are adopted that are appropriate to the
      desired outcomes;
   b) human and financial resources are secured both at a regional level and
      within constituent Councils; and
   c) strong links are made between the regional body and appropriate
      stakeholders, including both industry and with the EPA and the State
      Government.




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                                       LGA 3594
Current regional initiatives within South Australia
There are a broad range of regional initiatives currently under way in South
Australia. They include the following:

Metropolitan
  - Southern Region Waste Resource Authority
  - Western Region Waste Management Authority
  - Northern Adelaide Waste Management Authority
  - East Waste
  - WastecareSA
  -
Country2
  - Adelaide Hills Waste Management Authority
  - South East Local Government Association Waste Management Committee
      (Advisory Committee currently guiding SELGA through the development of
      a Regional Waste Strategy)
  - Eyre Peninsula Local Government Association Waste Management
      Committee (Advisory Committee currently guiding the EPLGA through the
      development of a Regional Waste Strategy)

These bodies encompass a broad range of roles and structures. Some are
responsible for managing a landfill asset on behalf of their member Councils (e.g.
Southern Region Waste Resource Authority). Others run regional collection and
sorting contracts, facilities and education programs (e.g. NAWMA). Others are in
the process of becoming operational and/or are producing regional strategies. All
are in the process of reform and review.

While it is not possible to provide details of each of these initiatives within this
Paper, it will be important for all Councils considering a regional approach to
familiarize themselves with the approaches taken by each of these entities. The
LGA Waste Committee will provide opportunities for these issues to be explored in
a series of seminars and workshops over coming months.




2
 It is worth noting that the Adelaide Hills WMA is currently undertaking a review of its role and activities
and that both the SELGA and EPLGA Committees are expected to put forward options to their member
Councils regarding possible structural arrangements in the near future.
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                                                   LGA 3594
Structural options for the establishment of Regional Local Government
Waste Groups
There are a range of structural options available for the establishment of Regional
Local Government Waste Groups under existing legislation. There is also the
option of pursuing the introduction of new legislation to facilitate the formation of
these groups, with the State Government.

With all structures, it will be important to ensure that groups do not create a conflict
of interest by taking on both regulatory and service delivery roles that are related.
This issue, among others, will require careful thought and consideration by
Councils in each region prior to moving ahead with any given approach.

Available options include the following:
   - use of existing regional Local Government Associations;
   - establishment of regional subsidiaries specifically for this purpose (under
       the Local Government Act 1999);
   - establishment of public corporations specifically for this purpose (under the
       Associations Incorporation Act 1985); and
   - pursuing the adoption of new legislation at the State level (considered highly
       unlikely).

The selection between these options will be guided by the role to be undertaken by
the body concerned, and the level of independence and autonomy required to fully
perform that role.

Use of existing regional Local Government Associations
South Australian Councils are already organised into regions through their regional
Local Government Associations (regional LGAs). Two of these regional LGAs
(South-East LGA and Eyre Peninsula LGA) are currently in the process of
producing regional waste strategies. Structural arrangements to carry these
strategies forward are yet to be determined beyond these interim arrangements.

It is likely that this option would require the establishment of a Waste Advisory
Committee, or similar, to report to the Board of the regional LGA. That Committee
could then provide advice to assist the Board of the regional LGA to make
decisions on waste-related matters.

Most regional LGAs are established as regional subsidiaries under section 43 of
the Local Government Act 1999. As such they are body corporates with the
powers, functions and duties outlined in their charters. Should a new role relating
to waste management be added to these existing bodies, a comprehensive review
of their existing charters would be required.

Pros
   -   can utilise an existing structure with an existing Board of Management
   -   credibility with member Councils and other stakeholders
   -   consistent with existing regional culture to use this structure
   -   resources likely to be a less contentious issue
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                                        LGA 3594
   -   in some cases may avoid lengthy debate about possible groupings of
       Councils for this purpose

Cons
  - requires a comprehensive review of the charters of existing regional LGAs
  - Waste Advisory Committees, if established, would not have direct decision-
     making powers, but rather would operate by providing advice to the Board
     of the regional LGA
  - while some regions are a good size to manage waste operations at a
     regional level, others may be considered too large to operate effectively and
     would therefore require sub-regionalisation to be considered (this could
     potentially still occur under the umbrella of the regional LGA framework).


Establishment of regional subsidiaries under the Local Government Act 1999
Another option is to establish a regional subsidiary, under section 43 of the Local
Government Act 1999, specifically for this purpose.

Member Councils could establish such a body with a charter listing the powers,
functions and duties as appropriate to the proposed body’s role. This body would
have its own Board and would have decision-making powers as determined within
its charter.

Subsidiaries are entities that, although established by Councils, are nevertheless
autonomous. They are separate legal entities, with their own legal personality,
able to make their own decisions, enter into contracts, sue and be sued, own
property, and engage staff. Autonomy aside, they are quite clearly accountable to
their member Councils and also to the Minister.

The Rules of a regional subsidiary are to be set out in its Charter which must be
approved by the Minister. There is no requirement for public consultation prior to
adoption. Regional subsidiaries must provide a business plan (to be reviewed
annually), an annual budget, an annual audited financial statement and an annual
report.

Over arching the Charter is that it is subject to the direction and control of the
Council and subject to review by the Minister for Local Government.

Pros
   - dedicated regional structure that can focus entirely on waste and resource
     management issues
   - decision-making body that does not rely on another Board to make
     determinations on waste issues
   - scale of bodies can be determined as appropriate, without a requirement to
     match with existing boundaries of regional LGAs
   - accountable to its member Councils (but also to the Minister for Local
     Government)

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                                        LGA 3594
   -   Establishment of a regional subsidiary does not derogate from the power of
       a member Council to act in a matter

Cons
  - bodies established in this way would be entirely new, and would therefore
     not enjoy the existing relationship and credibility with Councils that regional
     LGAs could deliver
  - questions of the relationships between these bodies and member Councils
     and existing regional LGAs would require consideration and clarification in
     the charter of the new body – member councils liable for the actions of the
     Board members
  - liabilities are guaranteed by the member Councils
  - subject to Ministerial review
  - accountable to the Minister for Local Government (but also to its member
     Councils)

Establishment of an incorporated association under the Associations
Incorporations Act 1985
The purpose of an incorporated association must fit within the eligibility criteria set
out in Section 18 of the Associations Incorporation Act and principally cannot be a
body formed with a principal or subsidiary object to engage in trade or commerce
or to secure a pecuniary profit.

This aside, the Act accepts that an association must have finance in order to
operate and permits the association to make a profit. Upon dissolution or winding
up, when all creditors have been paid, any surplus asset must be distributed in
accordance with the Rules of the Association to an organisation with similar
objectives and not to the members of the defunct association.

Equally, trade and commerce is permissible provided that when the association
buys and sells, the income generated is used for financial support of the
association and in a manner directly related to the principal objects of the
association.

Upon incorporation the association has perpetual succession, is a separate
corporate entity, is entitled to be sued or sue in its corporate name, and its
members are given limited liability.

Pros
   - no direct liability from member Councils
   - decision making body that does not rely on another Board to make
     determinations on waste issues
   - difficulties if wound up and ‘replacement’ has different membership

Cons
  - primary object is to engage in trade or commerce then would require the
     Commission’s approval.
  - Councils cannot delegate to an association.
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                                        LGA 3594
Arrangements to be put in place under new legislation
There are a range of possible options for arrangements to be put in place under
new legislation, on a voluntary basis. Should Councils indicate an interest in this
approach, further work will be undertaken by the LGA Waste Committee to
determine the precise features required.

In Conclusion
The LGA Waste Committee is providing support and information to assist Councils
in determining the best way forward to support the introduction of waste reforms
with the full support of Councils. It is important that all Councils consider the nature
of the reform they wish to introduce and identify the most effective mechanism to
be put in place to support that process.

The possible formation of Regional Local Government Waste Groups is entirely
optional for Local Government in SA. Support will be provided by the LGA Waste
Committee to assist Councils in deciding whether this path will assist them to move
forward.




The LGA Waste Committee has been formed to advocate for the needs of the Local Government sector in South Australia
                          and provide leadership and advice through which to deal with
                 waste and resource management issues in a coordinated and unified manner.



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APPENDIX A:
This appendix is included to assist Councils in considering the first two steps in the
process outlined in this Options Paper (see page 5). The first questions that need
to be answered are as follows:

    1. What are the core issues and needs in this area?
    2. Will a regional approach help to meet those needs?

While this checklist is designed as a starting point for discussions, it is important
that the list be developed with reference to the particular circumstances within
each region. In generating a more complete list of issues and needs within a
region, it may be beneficial to involve not only each Council, but also others within
your region such as commercial operators in waste and resource management.

                                                           Could a regional approach assist?
Core Issues and needs                                Yes        No        Don’t Know
Numerous landfills within region – costs of
maintaining these increasing
Costs of landfill management accelerating – but
already operating minimal no. of sites
Demand for recycling service provision to the
community – costs too high at present
Demand for recycling service provision to the
community – markets unavailable
Demand for upgraded waste/recycling
collection services – interest in coordinating
with neighbouring Councils to gain economies
of scale
Poor community understanding of waste and
resource management issues
Frustration at lack of responsibility by private                            (Will depend on the
sector for waste generated (e.g. tyres)                                   industry’s reaction to
                                                                          request for reform from
                                                                          within the region)
Dissatisfaction with current collection service                           (Although this depends
provider or current contract is coming to a close                         on level of interest in
– time to negotiate new contract                                          cooperating with
                                                                          neighbouring Councils
                                                                          who may also have
                                                                          contracts coming up)
Interest in developing composting industry
within the region
Issues in common with neighbours – responses
to those issues currently disjointed or not able
to occur
Interest in assessing new and emerging
technologies – volumes and funding required
higher than that generated by individual
Councils
Interest in standardising service provision
across the region
Others…



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