Wednesday, 10 October 2018

Questions (9)

John Curran

Question:

9. Deputy John Curran asked the Minister for Communications, Climate Action and Environment his plans to set up a waste regulator for the industry in view of the recently published Competition and Consumer Protection Commission report which found that 25% of consumers in the greater Dublin area did not have the option of more than one service provider; and if he will make a statement on the matter. [41058/18]

View answer

Oral answers (6 contributions) (Question to Communications)

Recently, the Competition and Consumer Protection Commission, CCPC, published a report, which found that one quarter of consumers in the greater Dublin area do not have more than one supplier for their domestic waste and that there is a lack of competition in the market. Does the Minister have specific plans to introduce competition to the market in the Dublin area?

I thank the CCPC for the significant body of work it has carried out in this report. The findings of this report clearly support the policy decision that I took to introduce an incentivised pricing model by abolishing flat-rate fees, rather than a blanket pay-by-kilogram system proposed previously. The report notes that it took 19 years for a policy to be implemented to abolish flat-rate fee structures.

The report shows that waste collection costs are between 63 cent and 77 cent per day and only 6% of people cited cost as a reason for not having their waste collected. Furthermore, the CCPC acknowledges the work of the price monitoring group, PMG, which I established in July 2017 to monitor prices for consumers offered by the waste sector and to provide oversight of the industry as flat fees were being phased out. It confirms that consumers have seen price stability across the sector over the past 12 months with no evidence of price gouging.

It is important to be clear that, as a country, we have zero spare capacity in our landfills today. We are now on the verge of an emergency situation with nowhere for any extra waste to go. The ban on flat-rate fees was necessary to incentivise householders to recycle and compost more and to send less waste to landfill. We have invested €3 million in education and awareness in relation to what goes into one's recycling bin and how to use one's brown bin effectively.

I welcome the fact that the CCPC does not call for a one-size-fits-all regulatory approach and that, based on data collection and consultation, different competition models can be introduced for different geographic areas. The nature of the market is complex, as both the CCPC and the PMG have identified. Therefore, the findings of this CCPC report must be studied with care and diligence to ensure consumer well-being is protected and our environmental goals are met. The hybrid model suggested could help to extend the coverage of door-to-door collections nationwide, while ensuring value for money for the householder and providing certainty for investment by the waste sector.

This report, combined with the ongoing work of the PMG, and the finalisation of the European circular economy waste and plastics legislation framework, will inform the development of a future waste management policy, including our environmental goals, regulatory and market structures, and policy instruments and tools.

The Minister's reply did not really address the question, which was about competition in the market. I acknowledge the work the CCPC did but it found that one quarter of households in Dublin do not have an alternative to their current supplier. Even in areas where there is another supplier, I do not believe there is real competition in the market. I live in an ordinary Dublin suburb and auctioneers regularly drop leaflets into my door as they vie for the business of selling my house, even though it is not on the market. Pizzerias and Chinese takeaways all vie for my business in the same way but nobody drops in leaflets about waste. The utility suppliers all compete for business with me but there appears to be no competition over waste and domestic refuse collection. I also do not believe there is transparency in the market.

The report of the CCPC stated that only one in ten of those who could transfer did so. Where people did transfer, the average saving was only approximately €17 per year so substantial savings are not available in this area. The CCPC is looking at moving away from competition in the market, particularly in areas where services are not being provided at present. The report highlights the lack of data and information, though the price monitoring group is helping to provide data at the moment. The CCPC carried out a survey which showed that just 6% of people surveyed said price was an issue for them. It is a complex area and the priority is to reduce the amount of waste going into black bins and to minimise the amount of plastic being generated, as well as recycling the plastic that is generated.

I fully agree with the Minister on recycling but his answer is interesting insofar as it revealed the fact that only a small number of people changed from one supplier to another. That indicates a lack of competition in the market. It also indicates a lack of transparency. If one goes onto the websites of various waste management companies to try to work out what the costs of moving would be, it is very difficult to do so.

The Minister has a role in this. He indicated that when people did change, savings were minimal. Closeness in pricing structures makes it a cartel-type operation, rather than a competitive environment. I fully support moving away from landfill but I do not see competition in the market and consumers deserve protection, which is lacking at the moment.

The CCPC did not find a cartel in the market and said there was no price gouging. The Deputy suggested that the lack of competition was why people were not switching but people can save between €200 and €300 by switching their electricity suppliers, yet a large cohort of the population do not do so. Even when the savings are there, people do not move. I understand from colleagues that the same thing happens with financial services and mortgages, where people can save a significant amount of money but do not do so. There is a certain inertia in Ireland in this regard and the research published by the CCPC highlighted mixed views on whether there should be competition within the market, which might involve two or three trucks driving down a single road, or competition for the market, where an operator bids for exclusive access to a particular part of the market.