More than a thousand surveyed communes, nearly 300 undertakings. The Office of Competition and Consumer Protection examined the communal waste management in Poland. The result is a report that analyzes the competition in that market

On 1 January 2012 an amendment prepared by the Ministry of Environment entered into force, changing the Act on maintaining cleanliness and order in communes. It completely changed the system of waste management in Poland. So far, the property owners decided which undertaking collected their waste. Under current rules the choice of such a company can only be made by the municipality. It will choose service provider by a tender procedure, to serve throughout its territory, in the case of larger communes - in a certain area. Local authorities have to introduce new solutions until mid-2013.

The analysis showed that the communal waste market has so far met the technical and economic conditions of a competitive market. In more than 85 percent communes surveyed, there worked at least two entities, and on average in one territorial unit more than four udertakings competed with each other. It gave consumers the opportunity to negotiate contracts, put pressure on the undertakings and pay lower rates.

While working on the new regulations, the Office of Competition and Consumer Protection decided to take a look at what is the situation in this market. The result is a report Competition in the Polish market of reception and management of communal waste. UOKiK examined the situation in more than 1,000 communes - in all 903 urban and urban-rural ones, and in about 10 percent rural areas. In addition, the regulations were based on surveys conducted among nearly 300 undertakings.

The conclusions of the report primarily confirmed the concerns of the Office regarding the new regulations. While supporting the general goals that guided the legislature (such as meeting EU standards for environmental protection) already at the stage of inter-departmental consultations, UOKiK highlighted the negative effects of the adopted solutions. First of all, the emergence of local monopolies rather than competition for existing customers.

The analysis showed that the communal waste market has so far met the technical and economic conditions of a competitive market. In more than 85 percent communes surveyed, there worked at least two entities, and on average in one territorial unit more than four udertakings competed with each other. It gave consumers the opportunity to negotiate contracts, put pressure on the undertakings and pay lower rates. In markets where there is only one entity, there is no incentive to reduce prices and increase the quality of services. The experience of the Office shows that monopolists use their advantage discriminating their customers. Only since 2010 ten decisions on abuse of a dominant position by undertakings operating in the waste market were issued. Another negative effect of the act will involve elimination of many currently operating entities from the market.

Moreover, it is worth noting that the new solutions will not be beneficial for local governments, which may incur additional costs. An example of communes that before 2012 by way of referendum took over the "dominion over the waste" shows that in most cases the income from residents for waste collection is lower than that provided to the undertakings receiving waste.

The Office also looked at solutions existing in other European countries. Although most of them also have a model similar to that currently implemented in Poland, this does not guarantee, however, the smooth operation of the waste management system. Before the courts of many countries there are ongoing disputes about ownership of recyclable waste, there is a lack of innovation and no possibility of entry for new players. Therefore, some countries are moving away from inefficient ways of waste management. An example is Ireland, where the introduction of market mechanisms resulted in lower prices and increased quality of service.

The report also points out the positive effects the amendment of the law can bring. In most communes, which took over the "dominion over the waste", the number of waste received from residents increased. This can have an impact on reducing the number of illegal waste dumps.

The pros and cons of the new waste collection and management system and the situation of consumers in this market were discussed during a debate organized by UOKiK on March 15, 2012. The debate was attended by representatives of the UOKiK, the Ministry of Environment, undertakings, local governments and academic circles.

The representatives of the Ministry of Environment present at the debate explained what were the objectives of the new law.

- The Act aims at creation of the waste management system and reduction of their storage as well as fulfillment of the EU obligations - said Małgorzata Szymborska, Deputy Director of Waste Management Department.

- We believe that a solution could be taken to reconcile the protection of the environment and competition ( ...) Unfortunately, our position has not been included in the finally adopted shape of legislation, and probably as a consequence the competitive market structure built over the years will be neglected - said during the meeting the President of UOKiK Małgorzata Kasnodębska-Tomkiel, presenting the position of UOKiK in this case.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: +48 22 55 60 106
Fax: +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]