Waste Management 2015 Annual Report Download - page 77

Our landfill operations are affected by the increasing preference for alternatives to landfill disposal. Many
state and local governments mandate recycling and waste reduction at the source and prohibit the disposal of
certain types of waste, such as yard waste, food waste, and electronics at landfills. The number of state and local
governments with recycling requirements and disposal bans continues to grow, while the logistics and economics
of recycling the items remain challenging.
Various states have enacted, or are considering enacting, laws that restrict the disposal within the state of
solid waste generated outside the state. While laws that overtly discriminate against out-of-state waste have been
found to be unconstitutional, some laws that are less overtly discriminatory have been upheld in court. From time
to time, the United States Congress has considered legislation authorizing states to adopt regulations, restrictions,
or taxes on the importation of out-of-state or out-of-jurisdiction waste. Additionally, several state and local
governments have enacted “flow control” regulations, which attempt to require that all waste generated within
the state or local jurisdiction be deposited at specific sites. In 1994, the United States Supreme Court ruled that a
flow control ordinance that gave preference to a local facility that was privately owned was unconstitutional, but
in 2007, the Court ruled that an ordinance directing waste to a facility owned by the local government was
constitutional. The United States Congress’ adoption of legislation allowing restrictions on interstate
transportation of out-of-state or out-of-jurisdiction waste or certain types of flow control, or courts’
interpretations of interstate waste and flow control legislation, could adversely affect our solid and hazardous
waste management services.
Additionally, regulations establishing extended producer responsibility (“EPR”) are being considered or
implemented in many places around the world, including in Canada and the U.S. EPR regulations are designed to
place either partial or total responsibility on producers to fund the post-use life cycle of the products they create.
Along with the funding responsibility, producers may be required to take over management of local recycling
programs by taking back their products from end users or managing the collection operations and recycling
processing infrastructure. There is no federal law establishing EPR in the U.S. or Canada; however, state,
provincial and local governments could, and in some cases have, taken steps to implement EPR regulations. If
wide-ranging EPR regulations were adopted, they could have a fundamental impact on the waste, recycling and
other streams we manage and how we operate our business, including contract terms and pricing.
Many states, provinces and local jurisdictions have enacted “fitness” laws that allow the agencies that have
jurisdiction over waste services contracts or permits to deny or revoke these contracts or permits based on the
applicant’s or permit holder’s compliance history. Some states, provinces and local jurisdictions go further and
consider the compliance history of the parent, subsidiaries or affiliated companies, in addition to the applicant or
permit holder. These laws authorize the agencies to make determinations of an applicant’s or permit holder’s
fitness to be awarded a contract to operate, and to deny or revoke a contract or permit because of unfitness,
unless there is a showing that the applicant or permit holder has been rehabilitated through the adoption of
various operating policies and procedures put in place to assure future compliance with applicable laws and
regulations.
Foreign Import Regulation
Enforcement or implementation of foreign regulations can affect our ability to export products. In 2013, the
Chinese government began to strictly enforce regulations that establish limits on moisture and non-conforming
materials that may be contained in imported recycled paper and plastics as well as restricting the import of
certain other plastic recyclables. The higher quality expectations resulting from initiatives such as “Operation
Green Fence” have driven up operating costs in the recycling industry, particularly for single stream MRFs.
Single stream MRFs process a wide range of commingled materials and tend to receive a higher percentage of
non-recyclables, which results in increased processing and residual disposal costs. Despite these increased costs,
we believe we are well positioned among our potential competitors to respond to and comply with such
regulations. We are revising our service agreements to address these increased costs and are working with
stakeholders to educate the general public on the need to recycle properly.
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