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                                                                         Attachment 1 to Item 2
                                       Services & Organisation Committee Agenda, 6 March 2018
Noosa Council - Public Interest Test Report: Proposed Local Law No. 7 (Waste
Management) 2017
                                                                                                  1



Noosa Council - Public Interest Test Report

Local Law No. 7 (Waste Management) 2017


 1.        Introduction
In accordance with the procedure required under the Local Government Act 2009 (LG Act)
and the Local Government Regulation 2012 (LG Regulation), a public-interest test has been
conducted in respect of the anti-competitive provisions which were identified in the proposed
Local Law No.7 (Waste Management) 2017 (LL7).
The public interest test has been conducted against the principles and objectives set by the
Competition Principles Agreement which was outlined in the Public Interest Test Plan for LL7.
A copy of the Public Interest Test Plan is included as Annexure A to this Public Interest Test
Report.
In compliance with the LG Act and Section 15 of the LG Regulation, this Public Interest Test
Report has been prepared in accordance with the Guidelines for Conducting Reviews on Anti-
Competitive Provisions in Local Laws (Guidelines).

2.        Definitions
The following expressions used in this report have the following meanings:

        Council means the Noosa Shire Council.

        LL7 means the proposed Local Law No.7 (Waste Management) 2017.

3.        The Key NCP Objective
The key objective of the National Competition Policy (NCP) is to develop a more open and
integrated Australian market that limits anti-competitive conduct and removes the special
advantages previously enjoyed by government business activities, where it is in the public
interest to do so.
While NCP is designed to result in better use of resources and substantial and ongoing
benefits to the community, the introduction of increased levels of competition will not always
deliver the best overall result for the community.
Accordingly, governments have a responsibility to ensure that NCP reforms are only
implemented where it is demonstrated that such reforms are clearly in the public interest, that
is, there is a clear demonstration that competitive reform will yield a net benefit, and no
significant detriment, to the community. While Council is well aware of the potential benefits
that competition can bring to the community, Council will continue to ensure that competition
is not pursued for competition’s sake and that a considered and pragmatic approach is taken
to NCP.
One of the elements of flexibility in Queensland’s NCP review process involves the
consideration of economic or social adjustment costs of moving from one regulatory situation
to an alternative arrangement.
In some cases, reform that is clearly in the broad public interest may impose adjustment costs
on a particular group. In such cases, consideration can be given to whether transitionary
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Section 2

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measures are required to assist such groups. Transitionary measures may, as an example,
involve implementing reform over time or targeted assistance measures.
The aim of the NCP reform program is to deliver tangible benefits to all sectors of the
community. This is to be achieved by limiting anti-competitive conduct and removing special
advantages of government business activities where it is in the public interest to do so.

4.      The consultation process
The NCP requires Council to undertake a public benefit test process. Under the public benefit
test process, Council is required to take into consideration an array of public interest matters
including the environment, employment, social welfare and community interests.
Consideration of social impacts is an integral part of the NCP review process.
Social impacts are anything that will change a community’s cultural traditions or alter the ways
in which people live, work, play, relate to one another, organise to meet their needs, and
generally cope as members of society. An NCP review process is not a review of economic
considerations alone.
As part of the NCP review process, sufficient time must be allowed for informed community
participation in the review. The level and nature of participation is determined on a case by
case basis.
In this instance, Council determined that consultation be conducted by giving public notice of
the proposed local law in a local newspaper and inviting submissions. Also, public notices
were posted on public noticeboards in Council’s public office, and on Council’s website.
Letters were sent to representative bodies of stakeholder groups advising of the proposed
local law and inviting submissions. The public notice advised that consultation on anti-
competitive provisions was being conducted in conjunction with the public consultation about
the proposed local law.
In response to the public consultation undertaken by Council:-
       (a)     the national peak body for all stakeholders in the waste and resource recovery
       industry, the Waste Management Association of Australia (WMAA), delivered a
       submission to Council for its consideration; and
       (b)    the industry representative body, the Waste, Recycling Industry Association of
       Queensland Inc (“WRIQ”), which represents more than 90 Queensland based
       organisations ranging from large multi-national organisations through to small family
       operated enterprises, delivered a detailed submission.


5.      Report about the results of the consultation process
The report to Council, of which this public interest test report forms part, refers to submissions
received and arguments presented (for consideration by Council) about the public consultation
process, including public consultation in relation to possible anti-competitive provisions.


6.      Type of assessment
Council has previously made a determination about the depth of analysis and degree of rigour
required for its assessment. Council determined that it would be appropriate to undertake an
assessment which complied with the following principles set out in the National Competition
Policy Guidelines (Guidelines) for conducting reviews of anti-competitive provisions in local
laws:-

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     (a)         consultation with relevant businesses about the anti-competitive provisions;
     (b)         examination of the reasonable alternatives to the anti-competitive provisions;
     (c)         a cost benefit analysis that involves calculating the value of the impacts, both
                 positive and negative, of the anti-competitive provisions; and
     (d)         determining whether, on balance, the anti-competitive provisions should be
                 retained in the proposed local law in the overall public interest.
Council determined that its assessment should be conducted by Council as a minor
assessment with an emphasis on qualitative analysis with key impacts expressed in monetary
terms where data is available. Council determined that the review should be conducted in-
house by a team of Council officers.

7.         Background for assessment
Council’s assessment was made against the background of the following considerations:-
           (a)     under the Environmental Protection Regulation 2008, Chapter 5A (Chapter 5A),
                   Council is currently responsible for the regulation of waste management in its
                   local government area and Chapter 5A applies in Council’s local government
                   area unless:-
                   (i)     Council makes a local law about waste management for its local
                           government area; and
                   (ii)    the local law states it replaces Chapter 5A;
           (b)     the proposed local law is about waste management for the local government area
                   of Council and, for practical purposes, replaces, and for that matter replicates,
                   the content of Chapter 5A;
           (c)     under the Waste Reduction and Recycling Regulation 2011, section 7 (section
                   7), Council may:-
                   (i)     by resolution, designate areas within its local government area in which
                           Council may conduct general waste or green waste collection; and
                   (ii)    decide the frequency of general waste or green waste collection in the
                           designated areas.
           (d)     under the proposed local law, Council preserves its right to, (as is the case
                   under section 7):-
                   (i)     by resolution, designate areas within its local government area in which
                           Council may conduct general waste or green waste collection; and
                   (ii)    decide the frequency of general waste or green waste collection in the
                           designated areas.
Under section 7, Council has previously adopted a restricted approach towards the designation
of areas in respect of which Council may conduct general waste collection and decide the
frequency of general waste collection in the designated areas.
Each of Chapter 5A and section 7 are due to expire on 1 July 2018. The extension of the date
by which each of Chapter 5A and section 7 will expire has been the subject of submissions to
the State Government by each of the Local Government Association of Queensland and
Waste, Recycling Industry Association of Queensland (WRIQ). However, there has been no
concrete indication that such an extension will be granted.
The object of the proposed local law is to protect the public health, safety and amenity related

Section 4

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to waste management by:-
        (a)   regulating the storage, servicing and removal of waste; and
        (b)   regulating the disposal of waste at waste facilities; and
        (c)   ensuring that an act or omission does not result in:-
              (i)      harm to human health or safety or personal injury; or
              (ii)     property damage or loss of amenity; or
              (iii)    environmental harm or environmental nuisance.
The focus of the proposed local law is ‘general waste’, the definition of which mirrors the
definition of ‘general waste' in the Environmental Protection Regulation 2008 for the purposes
of Chapter 5A.
The definition of ‘general waste’ includes ‘commercial waste’, ‘domestic waste’ and ‘recyclable
waste’. The definitions for the expressions ‘commercial waste’, ‘domestic waste’ and
‘recyclable waste’ in the proposed local law mirror the definitions for those expressions in the
Environmental Protection Regulation 2008, for the purposes of Chapter 5A.
Council has determined that regulation of waste management in the manner:-
        (a)   currently achieved by Chapter 5A and section 7; and
        (b)   to be achieved under the proposed local law, is an effective and appropriate
              means of achieving the objectives of the proposed local law.
Under the Local Government Act 2009, section 92, Council may levy utility charges for a
service, facility or activity for specified utilities, including waste management. Council currently
levies utility charges for waste management, including the conduct of general waste collection
in reliance on the exercise of powers under, collectively, Chapter 5A and section 7.
Council may continue to levy utility charges for services, facilities and activities for the utility of
waste management, and in particular the conduct of general waste collection, under the
proposed local law.
Part 3 of the proposed local law deals with the issue of waste receival and disposal, and in
particular:-
        (a)   the unlawful disposal of waste at a waste facility;
        (b)   restrictions on burning waste at a waste facility;
        (c)   restrictions on the use of a waste facility; and
        (d)   a person’s obligation to comply with directions and give information at a waste
              facility.

 8.       Results of consultation process

Public Consultation

As part of the NCP review process, sufficient time must be allowed for informed community
participation in the review. The level and nature of participation is determined on a case by
case basis.
Public consultation occurred over a 21 day period commencing on Friday 12 January 2018
and ending on Friday 2 February 2018 (consultation period).

Notice of public consultation and invitation to make submissions was:

Section 5

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 (a)   published in the local newspaper (Noosa News) on Friday 12th January 2018
       advising of the review and calling for submissions;
 (b)   posted on notice boards within the local government area;
 (c)   published on Council’s website during the consultation period; and
 (d)   sent to identified key stakeholders.
In response to the consultation undertaken by Council, two industry representative bodies
delivered submissions to Council for its consideration.
A total of 2 formal written submissions were received in response to the public consultation
undertaken by Council. Seven key issues were raised in the submissions:
      The proposed local law is anti-competitive as it allows Council to create a
         monopoly over commercial waste collection services and will result in higher
         prices for consumers without a commensurate increase in quality or
         innovation.
      The proposed local law provides no public benefit in its introduction.
      The proposed local law is anti-competitive and violates the competitive
         neutrality principle.
      The proposed local law will impact on business environment and place
         restrictions on business ownership, structural form, business behaviour or
         product / service quality.
      The proposed local law consultation process has been inadequate.
      The proposed local law is a replication of state legislation and is a lost
         opportunity for innovation.
      The proposed local law objectives could be achieved through other
         mechanisms, such as contract prescription.

Detail of the public consultation submissions received and responses is included as
Annexure B.

 9.      Reassessment of alternatives

Regulatory and non-regulatory alternatives available to Council which may achieve the
objectives of the proposed local law are listed in the Guidelines. The following alternatives
were considered to be ‘realistic’ alternatives and given further consideration:-
              regulation – public vs private action;
              public information and education programs;
Council also identified a further alternative of relying on the planning scheme to control storage
and collection of waste issues.
Consideration of the submissions received by Council supports Council’s conclusion that these
alternatives are not viable for the reasons detailed below.




Regulation - public vs. private action
This regime would involve a change to the proposed local law to provide that where more than
three complaints were received, Council would take action. Up to and including the third
complaint, Council would not take action but it would be open to individuals to take action in

Section 6

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respect of a nuisance caused by unsatisfactory storage and collection of waste practices. In
this way, Council would only be acting in genuine situations of nuisance rather than having to
respond to what are, for example, vexatious complaints.
While the alternative may provide some benefit to Council, it was considered to be only
nominally less anti-competitive than the proposed regime. There was also concern that some
genuine complaints would not be acted upon under this regime thereby limiting the rights of
individuals and the community in respect of public health and safety and amenity. It may also
be conceived by the community as an abrogation of local government responsibility and duty
of care.
Public information and education program
Consideration was given to this alternative however Council does not have the necessary
resources available to undertake an appropriate education program. It was also considered
that some form of regulatory control was necessary in order for Council to act immediately in
situations posing an unacceptable risk to public health and safety or causing a nuisance.
Planning scheme
This alternative would require the local law to be amended to specify that its application relates
to non-commercial activities only. Regulation of storage and collection of waste and nuisance
issues with respect to commercial activities would be by way of planning instruments.
There are several impacts which would arise from this alternative. The main difficulty with
moving to use of the planning scheme relates to the question of whether Council would have
adequate control over existing businesses. Under the planning scheme, where new
developments require some kind of approval, Council could place conditions on the approval
dealing with issues such as storage and collection of waste. However, in relation to existing
businesses, unless an approval under the planning scheme was required and unless that
original approval made provision for the activities covered by the proposed local law, Council
would have no power under the planning scheme to control the activities covered by the
proposed local law. Council may have recourse to a variety of powers under State legislation,
for example, the Environment Protection Act 1994 but it would depend on the individual
situation as to whether these or other Acts could be invoked and the degree of their
effectiveness is uncertain.
Also, the planning scheme cannot provide for a once-off occasion of significant intensity where
the undertaking of a business activity may result in increased, or exceptional, storage and
collection of waste issues, which could be the subject of Council regulation under the proposed
local law.

 10.     Structure and operation of the market
A brief description of the structure and operation of the market and who is affected is detailed
below.
Under Chapter 5A and section 7, Council may designate areas within its local government
area in which Council may conduct general waste and green waste collection and decide the
frequency of general waste and green waste collection in the designated areas.
Under the proposed local law, Council may designate areas within its local government area
in which Council may conduct general waste and green waste collection and decide the
frequency of general waste and green waste collection in the designated areas.
In Chapter 5A and the proposed local law, the expression ‘general waste’ is defined to include
commercial waste, domestic waste and recyclable waste and in each of Chapter 5A and the
proposed local law, those expressions have an identical meaning.

Section 7

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In reliance on the content of Chapter 5A and section 7, Council has entered into contractual
arrangements with an independent contractor about the conduct of general waste collection
and decided the frequency of general waste collection in designated areas in Council’s local
government area.
Under the proposed local law, Council’s current contractual arrangements with its contractor
about the conduct of general waste collection and the frequency of general waste collection in
designated areas in Council’s local government area may continue.
Reliance by Council on the provisions contained in Chapter 5A and section 7 is an integral
part of how Council regulates waste management in its local government area.
On the expiry of Chapter 5A and section 7, reliance by Council on the proposed local law will
be an integral part of how Council regulates waste management in its local government area.
For example, under each of Chapter 5A and the proposed local law, Council may supply to
premises the number of standard general waste containers that Council reasonably considers
is required at the premises as is necessary to contain the general waste produced at the
premises and require the occupier of the premises to place the waste container outside the
premises for the collection of general waste from the container on a scheduled collection day.
Collectively, Chapter 5A, section 7 and the utility charging provisions in the Local Government
Act 2009 result in a restriction on competition to the extent that Council designates an area
within its local government area in which Council will conduct general waste or green waste
collection and decides on the frequency of general waste or green waste collection in the
designated areas.
Under the proposed local law, the extent of the restriction on competition is subject to Council’s
decision to, under the proposed local law, designate areas within its local government area in
which Council will conduct general waste or green waste collection and decide the frequency
of general waste or green waste collection in the designated areas.
Council is not proposing that the nature of the restriction on competition under the
proposed local law will be different from the nature of the restriction on competition
which current exists under Chapter 5A and section 7.
Each of the realistic regulatory and non-regulatory alternatives identified above would:-
     (a) entail a local law which did not preserve Council’s ability to designate areas within
           its local government area in which Council may conduct general waste or green
           waste collection and decide the frequency of general waste or green waste
           collection in the designated areas or, alternatively, entail the making of no local law
           at all; and
      (b)   result in the removal of a restriction on competition.


Competitive neutrality
The Local Government Act 2009, chapter 3 part 2 division 2 is about the application of the
National Competition Policy Agreements in relation to the significant business activities of a
local government.
Under the competitive neutrality principle, an entity that is conducting a business activity in
competition with the private sector should not enjoy a net advantage over competitors only
because the entity is in the public sector.
Relevantly, a business activity is trading in goods and services by Council, for example, the
utility of waste management collection.

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11.     Key stakeholders and summary of impacts associated with LL7

 Key stakeholders that are affected by a move to an alternative arrangement,
 include the following:-
                   Council;
                   owners and occupiers of premises used for domestic purposes at
                    which general waste is generated;
                   owners and occupiers of commercial premises at which general
                    waste is generated;
                   potential owners and occupiers of premises used for domestic
                    purposes at which general waste is generated;
                   potential owners and occupiers of commercial premises at which
                    general waste is generated;
                   waste collection contractors (other than Council’s contracted waste
                    collection contractor) responsible for the collection of general waste
                    from premises, and in particular commercial premises, which
                    generate general waste in Council’s local government area;
                   Council’s contracted waste collection contractor which is
                    responsible for the collection of general waste from premises
                    (including commercial premises) which generate general waste in
                    Council’s local government area;
                   residents in close proximity to premises used for domestic purposes;
                   residents in close proximity to premises used for the undertaking of
                    commercial activities; and
                   conservation/environmental groups.
 A summary of the impacts for stakeholders associated with Council not making the proposed
 local law, are set out in the Table below.


      Stakeholder                                                    Impacts


  Council               If Chapter 5A and section 7 expire and Council does not make the proposed local law:-
                        (a)    Council will be exposed to significant financial liability under its contractual
                               arrangements with its current waste collection contractor, which is responsible
                               for the conduct of general waste collection services in designated areas in
                               Council’s local government area. This is a moderate negative impact;
                        (b)    Council will continue to incur the costs associated with the administration of
                               waste management in Council’s local government area and the costs of
                               administration of waste management may increase if the owners and occupiers
                               of premises at which general waste is generated for collection (including
                               commercial premises in particular) elect not to use the waste management
                               collection services offered by Council. This is a low negative impact;
                        (c)    Council will not incur costs associated with the enforcement of either Chapter 5A
                               or the proposed local law, but will still be responsible for the regulation of waste
                               management. This is a low negative impact;
                        (d)    Council anticipates an increase in the number of waste collection vehicle

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    Stakeholder                                                Impacts

                        movements within high density precincts and limited scope for Council to control
                        the timing of the delivery of these services, creating a range of impacts on
                        residents and tourists relating to traffic congestion, amenity (noise), and safety.
                        This is a low negative impact;
                  (e)   Council anticipates an increased prevalence of inappropriate (or insufficient)
                        waste containers being used, presenting potential health risks (including
                        improper waste disposal practices). This is a low negative impact;
                  (f)   there would be challenges associated with managing waste collection in an area
                        with a large number of mixed-use and high rise residential developments if
                        multiple waste collection service providers operate in that environment. This is a
                        low negative impact;
                  (g)   Council’s ability to meet waste diversion targets and actions developed to meet
                        statutory obligations established by the State would be significantly reduced as
                        recycling responsibility shifts from Council led to consumer led. In particular,
                        given the nature of recycling, where the costs are incurred privately, but the
                        benefits are realised publicly, the level of demand is expected to be lower than
                        what would be deemed efficient. This is a low negative impact;
                  (h)   Council anticipates an increase in complaints, for example:-
                        •       waste collection occurring at commercial premises before 5.00am
                                multiple times a week;
                        •       improper waste disposal, including overflowing bins, bin lids being left
                                open, broken bins, waste being left next to bins, and strong odours from
                                bins; and
                        •       bins placed out for collection well ahead of collection times and days or
                                not retrieved following collection.
                                 This is a low negative impact;
                  (i)   if Council is not able to directly or indirectly limit the number of waste collection
                        contractors serving a designated area, Council will not be able to:-
                        •       manage the number of waste vehicle collections that occur within the
                                area and directly control the hours of operation of the collections; or
                        •       control noise issues for residents and tourists as effectively by
                        •       limiting the times during which service providers may undertake waste
                                collection activities; or
                        •       prescribe appropriate collection containers and the frequency of
                                collection (with a view to ensuring that any potential health impacts
                                associated with improper waste disposal and overflowing containers are
                                minimised and that service standard requirements are met); or
                        •       adequately control Council’s ability to meet targets and undertake
                                actions set out in the Solid Waste Strategy 2024 in line with statutory
                                obligations established by the Queensland Government under the
                                Waste Reduction and Recycling Act 2011.
                                 This is a low negative impact;
                  (j)   it is not clear that the undertaking of waste collection services by additional waste
                        collection contractors will drive savings given the cost structure of waste
                        collection services, which is dominated by fixed costs, and hence lends itself to
                        the benefits of scale. The current tendering process applied by Council in
                        selecting a waste collection contractor already generates a high level of
                        competition in relation to cost. This is a low negative impact;
                  (k)   waste management is a highly capital intensive industry with significant
                        investment in assets. The cost structure gives rise to economies of scale,
                        whereby the average cost to perform a collection will decline as the number of
                        properties serviced increases. The ability of Council to tender a large number of

Section 10

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    Stakeholder                                               Impacts

                        properties requiring servicing through a competitive process allows each
                        tenderer to determine an appropriate fleet size to achieve a level of utilisation
                        that minimises average costs and leads to lower tendered prices. This is a low
                        negative impact;
                  (l)   if a Council contractor were to lose a segment of its current market share there
                        would be an increase in aggregate capital costs incurred across the industry and
                        a reduction in the average utilisation of waste collection vehicles across the
                        industry which would likely result in an increase in average collection costs. This
                        is a low negative impact;
                  (m)   the number of properties serviced and the waste tonnages to be collected will
                        become less certain (due to greater competition within a specified area), and a
                        contractor tendering to undertake waste collection services in Council’s local
                        government area, would need to build a greater risk component into its tendered
                        prices in order to account for this uncertainty. This is a low negative impact.
                  (n)   waste collection contractors other than Council’s contracted waste collection
                        contractor may only offer specific services, for example, recycling services for
                        cardboard and paper which are more profitable, which could undermine any
                        existing recycling practices currently adopted by the owners and occupiers of
                        premises used for commercial purposes. This is a low negative impact;
                  (o)   Council will not be able to ensure that collection runs are not duplicated by a
                        number of different waste collection service providers in the same streets or
                        localities. This is a low negative impact;
                  (p)   Council’s ability to fund waste management facilities and broader waste
                        management activities (street bins, landfill remediation, education, compliance
                        functions, strategy development etc) will be reduced. This is a low negative
                        impact;
                          (q)    owners and occupiers of premises which generate limited general waste
                                 may not be effectively serviced for a reasonable price and may pay
                                 considerably higher charges to get waste containers serviced in
                                 contrast to Council’s service under which all waste generators pay the
                                 same for the same collection service, regardless of the location of the
                                 premises. This is a low negative impact;
                  (r)   increased whole of community waste management costs would be incurred
                        given higher servicing costs per collection due to reduced economies of scale
                        and utilisation and greater uncertainty surrounding the properties at which waste
                        collection services are to be provided on an opt in basis. This is a low negative
                        impact;
                  (s)   there would be increased potential for long haul transport of general waste,
                        including recyclables, for processing and disposal out of Council’s local
                        government area. This is a low negative impact.
                  In summary, the analysis of the costs and benefits of moving to the alternative
                  arrangement, that is, not making the proposed local law, would result in a
                  moderate negative impact for this stakeholder.
  Owners and      If Chapter 5A and section 7 expire and Council does not make the proposed local law:-
  occupiers of
  premises used   (a)   the public health, safety and amenity relating to waste management of owners
  for domestic          and occupiers of premises used for domestic purposes at which general waste
  purposes at           is generated may not be preserved. This is a low negative impact;
  which general   (b)   Council anticipates an increase in the number of waste collection vehicle
  waste is              movements within high density precincts and limited scope for Council to control
  generated             the timing of the delivery of these services, creating a range of impacts on
                        residents and tourists relating to traffic congestion, amenity (noise), and safety.
                        This is a low negative impact;
                  (c)   Council anticipates an increased prevalence of inappropriate (or insufficient)
                        waste containers being used, presenting potential health risks (including

Section 11

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    Stakeholder                                                Impacts

                         improper waste disposal practices). This is a low negative impact;
                  (d)    Council will not be able to ensure that persons who generate general waste have
                         access to appropriate collection containers and are serviced at an appropriate
                         frequency and that potential health impacts associated with improper waste
                         disposal and collection are minimised. This is a low negative impact.
                  If Chapter 5A and section 7 expire and Council makes the proposed local law, the public
                  health, safety and amenity relating to waste management of owners and occupiers of
                  premises used for domestic purposes at which general waste is generated will be
                  preserved by the enforcement of the proposed local law by Council.
                  In summary, the analysis of the costs and benefits of moving to the alternative
                  arrangement, that is, not making the proposed local law, would result in a low
                  negative impact for this stakeholder.

                  If Chapter 5A and section 7 expire and Council does not make the proposed local law:-
  Owners and
  occupiers of    (a)    the public health, safety and amenity relating to waste management of owners
  commercial             and occupiers of commercial premises at which general waste is generated may
  premises at            not be preserved. This is a low negative impact;
  which general
  waste is        (b)    Council anticipates an increase in the number of waste collection vehicle
  generated              movements within high density precincts and limited scope for Council to control
                         the timing of the delivery of these services, creating a range of impacts on
                         residents and tourists relating to traffic congestion, amenity (noise), and
                         safety This is a low negative impact;
                  (c)    Council anticipates an increased prevalence of inappropriate (or insufficient)
                         waste containers being used, presenting potential health risks (including
                         improper waste disposal practices). This is a low negative impact;
                  (d)    some occupiers of commercial premises (most likely businesses considered
                         attractive to private waste collection contractors due to the volume and/or nature
                         of waste generated) may enjoy reduced service costs under increased
                         competition, but for remaining occupiers utilising Council’s service, service costs
                         would inevitably increase because the same level of fixed costs would need to
                         be recovered from a smaller collections base. This is a low positive impact;
                  (e)    Council will not be able to ensure that persons who generate general waste have
                         access to appropriate collection containers and are serviced at an appropriate
                         frequency and that potential health impacts associated with improper waste
                         disposal and collection are minimised. This is a low negative impact;
                  (f)    waste collection contractors other than Council’s contracted waste collection
                         contractor may only offer specific services, for example, recycling services for
                         cardboard and paper which are more profitable which could undermine any
                         existing recycling practices currently adopted by the owners and occupiers of
                         premises used for commercial purposes. This is a low negative impact;
                  (g)    owners and occupiers of premises which generate limited general waste may
                         not be effectively serviced for a reasonable price and may pay considerably
                         higher charges to get waste containers serviced in contrast to Council’s service
                         under which all waste generators pay the same for the same collection service,
                         regardless of the location of the premises. This is a low negative impact.
                  If Chapter 5A and section 7 expire and Council makes the proposed local law, the public
                  health, safety and amenity relating to waste management of the owners and occupiers
                  of commercial premises at which general waste is generated will be preserved by the
                  enforcement of the proposed local law by Council.
                  In summary, the analysis of the costs and benefits of moving to the alternative
                  arrangement, that is, not making the proposed local law, would result in a low
                  negative impact for this stakeholder.

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    Stakeholder                                                    Impacts


  Potential owners
  and occupiers of
  premises used       If Chapter 5A and section 7 expire, and Council does not make the proposed local law,
  for domestic        the public health, safety and amenity relating to waste management of potential owners
  purposes at         and occupiers of premises used for domestic purposes at which general waste is
  which general       generated may not be preserved. This is a low negative impact.
  waste is            If Chapter 5A and section 7 expire, and Council makes the proposed local law, the
  generated           public health, safety and amenity relating to waste management of potential owners and
                      occupiers of premises used for domestic purposes at which general waste is generated
                      will be preserved by the enforcement of the proposed local law by Council.
                      In summary, the analysis of the costs and benefits of moving to the alternative
                      arrangement, that is, not making the proposed local law, would result in a low
                      negative impact for this stakeholder.
  Potential owners    If Chapter 5A and section 7 expire, and Council does not make the proposed local law,
  and occupiers of    the public health, safety and amenity relating to waste management of potential owners
  commercial          and occupiers of commercial premises at which general waste is generated may not be
  premises at         preserved. This is a low negative impact.
  which general
  waste is            If Chapter 5A and section 7 expire and Council makes the proposed local law, the public
  generated           health, safety and amenity relating to waste management of potential owners and
                      occupiers of commercial premises at which general waste is generated will be
                      preserved by the enforcement of the proposed local law by Council.
                      In summary, the analysis of the costs and benefits of moving to the alternative
                      arrangement, that is, not making the proposed local law, would result in a low
                      negative impact for this stakeholder.
  Waste collection    If Chapter 5A and section 7 expire, and Council does not make the proposed local law:-
  contractors
  (other than         (a)    waste collection contractors (other than Council’s contracted waste collection
  Council’s                  contractor) may collect general waste from premises which generate general
  contracted                 waste in Council’s local government area absent the restriction on competition
  waste collection           which flows from Chapter 5A and section 7. This is a moderate positive impact;
  contractor)         (b)    there is potential for the introduction of new fixed costs into the waste collection
  responsible for            industry (through an uplift in the number of operators providing services) that
  the collection of          would be defrayed over the same number of customers, increasing the average
  general waste              cost of service provision. This is a low negative impact;
  from premises,
  and in particular   (c)    the number of properties serviced and the waste tonnages to be collected will
  commercial                 become less certain (due to greater competition within a specified area), and a
  premises, which            contractor tendering to undertake waste collection services in Council’s local
  generate general           government area, would need to build a greater risk component into its tendered
  waste in                   prices in order to account for this uncertainty. This is a neutral impact;
  Council’s local     (d)    there would be increased potential for long haul transport of general waste,
  government area            including recyclables, for processing and disposal out of Council’s local
                             government area. This is a low negative impact.
                      If Chapter 5A and section 7 expire, and Council makes the proposed local law, waste
                      collection contractors (other than Council’s contracted waste collection contractor) may
                      collect general waste from premises which generate general waste in Council’s local
                      government area subject to the restriction on competition which flows from the making
                      of the proposed local law. This is a low negative impact because the making of the
                      proposed local law does not impact on Council’s power to levy utility charges under the
                      Local Government Act 2009.
                      In summary, the analysis of the costs and benefits of moving to the alternative
                      arrangement, that is, not making the proposed local law, would result in a low
                      positive impact for this stakeholder.

                      If Chapter 5A and section 7 expire, and Council does not make the proposed local law:-
  Council’s

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    Stakeholder                                                     Impacts

  contracted
  waste collection     (a)    the number of collections of general waste from premises which generate
  contractor which            general waste in Council’s local government area may be reduced with the
  is responsible              consequent impact on profitability. This is a moderate negative impact;
  for the collection   (b)    Council will continue to incur the costs associated with the administration of
  of general waste            waste management in Council’s local government area and the costs of
  from premises               administration of waste management may increase if the owners and occupiers
  (including                  of premises at which general waste is generated for collection (including
  commercial                  commercial premises in particular) elect not to use the waste management
  premises) which             collection services offered by Council. This is a low negative impact;
  generate general
  waste in             (c)    there would be challenges associated with managing waste collection in an area
  Council’s local             with a large number of mixed-use and high rise residential developments if
  government area             multiple waste collection service providers operate in that environment. This is a
                              low negative impact;
                       (d)    if a Council contractor were to lose a segment of its current market share there
                              would be an increase in aggregate capital costs incurred across the industry and
                              a reduction in the average utilisation of waste collection vehicles across the
                              industry which would likely result in an increase in average collection costs. This
                              is a low negative impact;
                       (e)    the number of properties serviced and the waste tonnages to be collected will
                              become less certain (due to greater competition within a specified area), and a
                              contractor tendering to undertake waste collection services in Council’s local
                              government area, would need to build a greater risk component into its tendered
                              prices in order to account for this uncertainty. This is a neutral impact.
                       If Chapter 5A and section 7 expire, and Council does make the proposed local law,
                       Council’s contracted waste collection contractor will continue to be responsible for the
                       collection of general waste from premises which generate general waste in Council’s
                       local government area.
                       In summary, the analysis of the costs and benefits of moving to the alternative
                       arrangement, that is, not making the proposed local law, would result in a low
                       negative impact for this stakeholder.


  Residents in         If Chapter 5A and section 7 expire and Council does not make the proposed local law:-
  close proximity
  to premises          (a)    the public health, safety and amenity relating to waste management of residents
  used for                    in close proximity to premises used for domestic purposes may not be preserved.
  domestic                    This is a low negative impact;
  purposes             (b)    Council anticipates an increase in the number of waste collection vehicle
                              movements within high density precincts and limited scope for Council to control
                              the timing of the delivery of these services, creating a range of impacts on
                              residents and tourists relating to traffic congestion, amenity (noise), and safety.
                              This is a low negative impact;
                       (c)    Council anticipates an increased prevalence of inappropriate (or insufficient)
                              waste containers being used, presenting potential health risks (including
                              improper waste disposal practices). This is a low negative impact.
                       If Chapter 5A and section 7 expire and Council makes the proposed local law, the public
                       health, safety and amenity relating to waste management of residents in close proximity
                       to premises used for domestic purposes will be preserved by the enforcement of the
                       proposed local law by Council.
                       In summary, the analysis of the costs and benefits of moving to the alternative
                       arrangement, that is, not making the proposed local law, would result in a low
                       negative impact for this stakeholder.

  Residents in         If Chapter 5A and section 7 expire and Council does not make the proposed local law:-
  close proximity

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    Stakeholder                                                  Impacts

  to premises
  used for the     (a)    the public health, safety and amenity relating to waste management of
  undertaking of          residents in close proximity to premises used for the undertaking of commercial
  commercial              activities may not be preserved. This is a low negative impact;
  activities       (b)    Council anticipates an increase in the number of waste collection vehicle
                          movements within high density precincts and limited scope for Council to control
                          the timing of the delivery of these services, creating a range of impacts on
                          residents and tourists relating to traffic congestion, amenity (noise), and safety.
                          This is a low negative impact;
                   (c)    Council anticipates an increased prevalence of inappropriate (or insufficient)
                          waste containers being used, presenting potential health risks (including
                          improper waste disposal practices). This is a low negative impact.
                   If Chapter 5A and section 7 expire and Council makes the proposed local law, the public
                   health, safety and amenity relating to waste management of residents in close proximity
                   to premises used for the undertaking of commercial activities will be preserved by the
                   enforcement of the proposed local law by Council.
                   In summary, the analysis of the costs and benefits of moving to the alternative
                   arrangement, that is, not making the proposed local law, would result in a low
                   negative impact for this stakeholder.


  Conservation /    If chapter 5A and section 7 expire and Council does not make the proposed local law:-
  environmental
  groups           (a)    Council anticipates an increase in the number of waste collection vehicle
                          movements within high density precincts and limited scope for Council to control
                          the timing of the delivery of these services, creating a range of impacts on
                          residents and tourists relating to environmental matters, including traffic
                          congestion and amenity (noise). This is a low negative impact;
                   (b)    if Council is not able to directly or indirectly limit the number of waste collection
                          contractors serving a designated area, Council will not be able to control noise
                          issues for residents and tourists by limiting the times during which service
                          providers may undertake waste collection activities and this will result in a
                          diminution of environmental values. This is a low negative impact;
                   (c)    Council’s ability to fund waste management facilities and broader waste
                          management activities (street bins, landfill remediation, education, compliance
                          functions, strategy development etc.) will be reduced and there will be a
                          consequent reduction in environmental values. This is a low negative impact;
                   (d)    there would be increased potential for long haul transport of general waste,
                          including recyclables, for processing and disposal out of Council’s local
                          government area and a consequent reduction in environmental values. This is a
                          low negative impact.
                   In summary, the analysis of the costs and benefits of moving to the alternative
                   arrangement, that is, not making the proposed local law, would result in a low
                   negative impact for this stakeholder.


  Overall Result   Overall, the analysis of costs and benefits has determined there would be a net cost to
                   the community as a whole in moving to the alternative arrangement that is, not making
                   the proposed local law.
                   There would be a benefit to a particular stakeholder, waste collection contractors (other
                   than Council’s contracted waste collection contractor) in the event of a move to the
                   alternative arrangement that is, not making the proposed local law.
                   Also, owners and occupiers of commercial premises at which general waste is generated
                   and potential owners and occupiers of commercial premises at which general waste is
                   generated could potentially benefit from the removal of the barrier to entry to the market,
                   and in particular, the removal of a restriction on competition.

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       Stakeholder                                                 Impacts


                       However, the move to the alternative arrangement, that is, not making the proposed local
                       law, would result in a moderate negative impact or a low negative impact for all other
                       identified stakeholders. The move to the alternative arrangement would result in
                       increased costs for Council. These costs could be substantial and would be passed on
                       to the community.
                       Overall, the analysis of costs and benefits has determined that there would be a net cost
                       in moving to the alternative arrangement, that is, not making the proposed local law. The
                       anti-competitive provisions in the proposed local law should be retained in the public
                       interest.




 12.       Recommendation

 In consideration of the impacts identified above, it is recommended that each of the anti-
 competitive provisions identified in the public interest test plan be retained in LL7 in the
 overall public interest, because:

 (a)     the benefit of the anti-competitive provisions to the community as a whole outweighs the
         cost; and

 (b)     the most appropriate way of achieving the objectives of LL7 is by restricting
         competition in the way provided in the anti-competitive provisions.

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                                                          ANNEXURE A




                                                                         

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ATTACHMENT A

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                                                                                                                                                    ANNEXURE B
 Public Submissions Received for the Proposed Local Law and Council’s Consideration
 Public Submissions for –
        Local Law No 7 (Waste Management) 2017 (the proposed local law)
        Public Interest Test Plan
 Advertised in the Noosa News on Friday 12th January 2018 and on Council’s website – “yoursaynoosa”.
 Public consultation occurred over a 21 day period commencing on Friday 12 January 2018 and ending on Friday 2
 February 2018

 Right to Information Act 2009 and Information Privacy Act 2009
 Unless otherwise authorised or required under a law any personal information contained in any submission made will only be utilised by Council for the
 purposes of conducting the Local Government Act 2009 prescribed consultation stage of Council’s Local Law making process


 TOTAL = 2 submissions received.
 Table 1 – Submissions received
  Submission from:          Submission details                                                                                     Key matters raised in submission

  Waste, Recycling Industry                                                                                                        The proposed local law:
                                  1.    Executive Summary
  Association of QLD (WRIQ)                                                                                                           is anti-competitive as it allows Council
                                                                                                                                       to create a monopoly over commercial
  {redacted}                      (a)   WRIQ opposes the introduction of the proposed local law on the following basis:
                                                                                                                                       waste collection services and will result
                                                                                                                                       in higher prices for consumers without a
  ‘These submissions are made           (i)       the proposed local law is anti-competitive and result's in continued higher
                                                                                                                                       commensurate increase in quality or
  on behalf of the members of           prices for consumers without a commensurate increase in quality or innovation. All
                                                                                                                                       innovation.
                                        businesses located in Councils jurisdiction currently pay on average 30 (thirty)
  the Waste, Recycling Industry                                                                                                       provides no public benefit in its
                                        percent more for their waste services as compared to businesses allowed to
  Association of Queensland                                                                                                            introduction.
                                        source services from non-council mandated provisions not in the Noosa Council
  Inc (WRIQ). WRIQ is the
                                        area. The making of this law presents opportunity to Council to further increase              is anti-competitive and violates the
  premier industry association                                                                                                         competitive neutrality principle. Will
  in Queensland, representing           business costs unilaterally;
                                                                                                                                       impact on business environment and
  more than 90 Queensland-                                                                                                             place restrictions on business
  based organisations ranging           (ii)      Council has failed to provide any evidence by way of independent
                                        reports, research or other data and findings that quantifies or determines any                 ownership, structural form, business
  from large multi-national                                                                                                            behaviour or product / service quality.
                                        community benefit by introducing the proposed local law, insofar as the proposed
  organisations through to
                                        local law relates to 'waste' and regulating the disposal of 'waste' at waste facilities;      consultation process has been

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  small family-operated                                                                                                       inadequate.
  enterprises.’                   (iii)   the introduction of the proposed local law will cause the Noosa Council
                                  (the Council) to violate the competitive neutrality principle; and                      No proposed actions in response to the
                                                                                                                          above.
                                  (iv)  Council's claims in its consultation papers that in the context of waste
                                  management, it is unlikely that the Proposed Local Law will:                            Refer response to issues 1, 2, 3, 4 and 5
                                        (A)        impact on the business environment in terms of size, distribution      in table 2 (below).
                                        and participation in the market; or
                                        (B)        place restrictions on business ownership, structural form,
                                        business behaviour or product/service quality.
                                        These statements are totally incorrect and misrepresent to the
                                        community the real impacts that arise in the making of this law

                                  (v)       The Queensland Competition Authority found in June 2012 Sunshine
                                  Coast Regional Council had a competitive advantage over its competitors in
                                  relation to waste and recycling services as it relates to its local law and that this
                                  advantage should be removed. On de amalgamation Noosa Council has
                                  continued to act in an anti- competitive, anti-business way against this
                                  independent authority advice using the basis of this original law

                          2.      The proposed local law

                          (a)       The proposed local law is intended to replace Chapter 5A : Waste Management by
                          Local Governments of the Environmental Protection Regulations 2008 (the Chapter 5A
                          provisions) and section 7 in Part 2A of the Waste Reduction and Recycling Regulation
                          2011 (section 7). The Chapter 5A and section 7 provisions were scheduled to expire on 1
                          July 2018. Government has recently advised both the LGAQ and our Association it now
                          intends to remove the expiry date provisions in the regulation, thus removing the necessity
                          for local governments to make these anti-competitive laws.

                          (b)       The regulation expiring evolved from the Health Act 1937. The Environmental
                          Legislat ion Amendment Bill (no 2) 1995, repealed the Refuse Management Regulation
                          1983, and the Sanitary Conveniences and Nightsoil Disposal Regulation 1976. The
                          regulation was remade to become sub ordinate legislation under the Environmental
                          Protection Act 1994.

                          Numerous modifications have regularly been made to the original regulatory wording, but
                          none has ever quantified the relevance of it in a 2017 more modern world.

                          The proposed local law allows the Council to designate areas within which it may conduct

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                                       general waste or green waste collection1. General waste is defined to include both
                                       domestic and commercial waste2.

                                       (c)      The proposed changes as described in Section 2 of the law - provides for the
                                       regulation of storage and removal of ' waste' from premises; and the regulation of the
                                       receiving and disposal of 'waste ' at waste facilities', rather than limiting the scope of the
                                       Council's to domestic, or even general, waste3.

                                       (d)      This indicates that Council may intend to expand the scope of the proposed local
                                       law to cover all types of waste and recyclables, in addition to domestic, commercial and
                                       green waste. This potentially gives the proposed local law a broader scope than the
                                       Chapter SA provisions. This broader scope cannot be justified by environmental concerns,
                                       health, public safety or community amenity and Council has provided no evidence to
                                       support this position. Environmental regulation and operating conditions of the waste
                                       management and recycling industry is well managed by existing legislation and the
                                       Department of Environment and Heritage Protection.

                                       3.       Industry's concerns about the proposed local law

                                       (a)      WRIQ's members acknowledge that domestic waste management is the role of
                                       local government. Industry is not trying to usurp Council's legitimate role as the provider of
                                       domestic waste services as that system functions very well.

                                       (b)      Industry advocates that if the introduction of a local law is so important to Council
                                       any local law provisions must be referenced to ·apply to domestic (household) waste and
                                       recycling services only (as was the original 1937 Health Act principle from which the state
                                       provisions evolved).

                                       (c)      Industry is, gravely concerned that Council is seeking to further restrict competition
                                       in the commercial waste and recycling industry without proper consultation or genuine
                                       consideration of the impact of the proposed local law to its community. It has failed to
                                       demonstrate the grounds or justification of any/ all environmental, safety or other aspects in
                                       support of the needs for this law.

                                       (d)      WRIQ argues the public interest and state interest tests applied by Council lack
                                       genuine transparency and fail to engage and clearly inform the community on such
                                       profound commercial impacts the introduction and amending of its local law will have on its
                                       ratepayers

1
 Section 5, proposed local law
2 Schedule to the proposed local law
3 Section 2, proposed local law

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                                3.1      Anti-competitive provisions in the proposed local law

                                (a)      Pursuant to section l5(a) of the Local Government Regulation 2012, a provision is
                                anti- competitive if it creates a barrier to:
                                         (i)        entry to a market; or
                                         (ii)       competition within a market.

                                (b)       The proposed local law is anti-competitive in that it allows Council to create a
                                monopoly over commercial waste collection services in designated areas thereby creating a
                                barrier to competition in that market.

                                (c)      In addition to WRIQ's concerns about the impact on competition in the commercial
                                waste collection industry, the objects of the law show that the proposed local law may
                                extend further than regulating the collection, storage and disposal of domestic and
                                commercial waste and may extend to all forms of waste collection and disposal 4. This
                                creates great uncertainty for business moving forward. For example, the intent to regulate
                                the disposal of 'waste' at waste facilities undermines all existing industry assets whose
                                owners have invested locally, employed local people and obtained the required state
                                approvals for the operation of the facilities. It will also detrimentally impact all companies
                                with investments and assets in the proximity to this. The ability of Council to interfere in the
                                market as it chooses creates instability and uncertainty and will discourage future
                                investment in the industry.

                                (d)       Council has already demonstrated that it can use its ability, under the Chapter 5A
                                provisions, to designate an area for general waste or green waste collection to interfere in
                                the market by monopolising commercial waste collections. As example it already mandates
                                all commercial businesses must use Council only provided services and as result local
                                business has no option to seek an alternate service provider. This is anti-competitive and
                                lacks all democratic privileges assigned to all commercial business in every other local
                                government jurisdiction. Business are being forced to use Council's prescribed services
                                without any option to "opt out". This not only impacts the waste management and recycling
                                industry, it also has a negative impact on businesses who are left unable to negotiate the
                                best deal for their waste collection services or organise their waste and recycling collection
                                operations in a manner that best suits their business needs.

                                3.2      Introduction of the proposed local law will increase prices for consumers

                                (a)       As set out at paragraph 3.1 (b) above, the introduction of the proposed local law
                                will allow the Council to maintain its monopoly over waste and recycling collection services

4
    See: paragraph 2(c) above

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                             in designated areas. The fact that Council will tender for collection services in designated
                             areas is no answer to this problem. The tender will allow one or two large waste collection
                             companies to dominate the market for a significant period of time. This will have the effect
                             of freezing the market for the length of the tender and it is unlikely that smaller businesses
                             could continue to operate during this period.

                             (b)       By forcing businesses in designated areas to use the Council's waste collection
                             services, Council eliminates the ability of any business to negotiate the best rates for their
                             rate collection services and prices will increase. As smaller operators go out of business,
                             there will be less incentive for the remaining large operators to compete on price.

                             (c)      Commercial ratepayers and businesses are currently paying more than 30 (thirty)
                             percent more for their waste and recycling services as compared to all businesses outside
                             of the Noosa Council jurisdiction. The introduction of this new law simply compounds the
                             issues that arise from Council's currently flawed ratings system applied to commercial
                             properties.

                             (d)      Further, the fewer operators left in the marketplace, the less incentive for
                             operators to innovate or introduce technology and deliver higher quality services.

                             (e)       Ultimately, the result of the proposed local law will be increased and higher prices
                             for lower quality and less innovative services.

                             3.3      No Public Benefit

                             (a)      In addition to those matters set out in clause 1(3) of the Competition Principles
                             Agreement, guidance on matters to be considered when assessing the public benefit can
                             also be found in Re AC/ Operations Pty Ltd5. In that case the following, non-exhaustive list
                             was considered to be relevant to constituting the public benefit:
                                      (i)        economic development including encouragement of research and capital
                                      investment;
                                      (ii)       fostering business efficiency particularly when it results in improved
                                      competitiveness;
                                      (iii)      industrial rationalisation resulting in more efficient allocation of resources
                                      at a lower or contained unit product cost;
                                      (iv)       expansion of employment or prevention of unemployment through
                                      efficient industries;
                                      (v)        employment growth in particular regions;
                                      (vi)       industrial harmony;
                                      (vii)      assistance to make small business efficient including promoting

5 (1991) ATPR (Com) 50-108

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                                 competitiveness;
                                 (viii)     improvement in quality and safety services and expansion of consumer
                                 choice;
                                 (ix)       supplying better information to consumers and to business to permit
                                 informed choices;
                                 (x)        promotion of equitable dealings in the market;
                                 (xi)       promotion of industry cost savings resulting in a contained lower price at
                                 all levels of the food chain;
                                 (xii)      development of import replacements;
                                 (xiii)     growth of export markets;
                                 (xiv)      steps to protect the environment.

                        (b)      The effect of enacting the changes to the local law does not create any public
                        benefit and will create a long-term detriment to the public of Queensland and to the market
                        generally across Queensland applying the criteria in Re ACI Operations Pty Ltd and the
                        Competition Principles Agreement.

                        (c)      These detriments include the following:
                                 (i)        The proposed local law interferes with the normal operating market
                                 environment by forcing upon all commercial ratepayers and other businesses
                                 Council controlled waste and recycling services. This will result in significant
                                 dislocation of businesses of waste and recycling service providers throughout the
                                 Noosa Council and reduces choice for commercial premises in choosing their
                                 waste services.
                                 (ii)       If all 'waste' related services are to be provided by Council's single
                                 contractor this will have a detrimental effect on all other local business providers
                                 already operating within the region. Many small family businesses providing
                                 services will be restricted by this law and as result companies will collapse and
                                 local families will be financially compromised.
                                 (iii)      Council having control over all 'waste' will likely result in one contractor
                                 having direct access to providing all 'waste' collections in the Council area. This
                                 will result in a long- term dislocation of the existing suppliers to the market, and
                                 reduce's the number of suppliers to the market during the term of that contract.
                                 This would result in a long- term disadvantage for the commercial rate payers, not
                                 to mention the significant detriment on the public throughout the region due to the
                                 loss of competitive waste services providers.
                                 (iv)       A Council imposed monopoly significantly reduces the incentive for
                                 technical development, efficiencies, improvement in productivity and performance
                                 within the industry. Industry is largely self-regulated and the largest drivers for
                                 continual improvement is the competitive nature of the existing structure of the
                                 market. This would be significantly damaged if the waste stream is no longer
                                 available within any commercially foreseeable time.

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                              (v)        Examples of innovation and technical development within the industry in
                              recent times includes vehicle engine design that meet and exceed high
                              international emission standards, vehicle design changes to accommodate
                              Australian operating conditions, compactor design and capability, compactor
                              paddle design, vehicle tracking and camera systems, GPS and other commercial
                              logging instrumentation systems, as well the materials currently used in compactor
                              and chassis manufacturer. Many of these innovations have a positive
                              environmental impact, demonstrating that competition is positive for the
                              environment while a lack of competition could stymie such beneficial
                              developments .
                              (vi)       The proposed local law will not encourage economic development and
                              research or capital investment. The number of waste disposal facilities trucks and
                              staff will remain materially unchanged, as this is dependent totally upon the
                              number of collection services, not the number of competitors operating within the
                              Councils' territory. This would potentially make other facilities owned by
                              competitors redundant and likely have a negative effect on economic growth.
                              (vii)      There would be no contribution to economic or employment growth within
                              the Noosa Council area. In fact, if smaller operators were forced to close, this
                              would have a detrimental impact on local employment within the Coastal region.
                              (viii)     There would be no particular incentive for the improvement of quality or
                              safety of the services even within the Councils' areas and certainly not within the
                              wider public. In particular there would be a reduction rather than an expansion of
                              consumer choice of service providers.
                              (ix)       The State Government has announced Queensland will introduce a
                              Container Refund Scheme (CRS) in July 2018. If the proposed local law is
                              introduced, Council will control the recycling operations for all commercial property
                              owners in designated precincts. Councils will, therefore, e:ontrol all containers
                              generated by all commercial premises cover by the proposed local law.
                              (x)        In the future, a local business owner may choose to provide its own
                              container for recyclables covered by the CRS or alternately seek to take its bottles
                              or cans to a local network operation, however it will still incur the full Council's rate
                              charge regardless. Under the proposed law Council would have total control to
                              determine what containers are approved for holding waste and recyclables and
                              how these rules are applied.
                              (xi)       · It is therefore very unlikely any business owner would choose to
                              participate in the CRS and this may, in the long term, affect the success of the
                              CRS.
                              (xii)      Council already has declared precincts that capture the entire Council
                              area and as result all commercial properties in the council area required to pay a
                              mandatory fee for council waste collection services. Evidence provides even
                              where a private contractor has offered a free or alternate recycling service to a
                              local business or where a business owner is contracted to a national or other

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                                 service arrangement and they have asked for an alternate recycling option from
                                 the private sector, Council officers have enforced these local laws upon that
                                 business owner and mandated they remove the private operators bin or cage from
                                 that business. Where the local business has asked Council for a refund for their
                                 recycling services as they wished to use a private company Council has denied
                                 that request advising the client they must pay for the service regardless if they use
                                 it or not via their rates notices. This supports the submission that the proposed
                                 local law is not consistent with a successful CRS.

                        (d)       The public benefit must be for the general public and the Queensland market as a
                        whole. No such benefit is identified and indeed there is a significant potential public
                        detriment in respect of reduced competition, reduced incentive to innovate, stymy
                        technological development, no economic benefits to the wider community, and
                        potentially Jong-term dislocation of the waste and recycling services industry that will be
                        the result of the proposed local law.

                        3.4      Violation of the competitive neutrality principle

                        (a)       Under section 43 of the Local Government Act 2009, a local council conducting a
                        business in competition with the private sector should not enjoy a net advantage over
                        competitors only because the entity is the public sector. The competitive neutrality principle
                        applies if the public benefit outweighs the costs of implementation.

                        (b)      For the reasons set out in section 2.2 above, there is no public benefit in enacting
                        the proposed local law (insofar as it relates to 'waste' and regulating the disposal of 'waste'
                        at waste facilities).

                        (c)      The imposition of a mandatory waste collection levy over businesses in designate
                        d areas, without an opt-out provision, will provide the Council with a competitive advantage
                        because no commercial provider can charge a levy to a potential customer, even when the
                        customer's preference is not to use the supplier's service.

                        (d)      In this respect, we note that in June 2012, in response to a complaint from WRIQ,
                        the Queensland Competition Authority found provisions similar to the proposed local law
                        that were already enacted by Council and that it violated the competitive neutrality principle.
                        Council maintains that violation in 2017.

                        (e)      Notably, the Council has not considered the use of tax and subsidy mechanisms
                        as an alternative method to achieve their stated objectives.

                        3.5      Concerns about the consultation process

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                                   (a)       Under section 38 of the Local Government Act 2009, the Council cannot make a
                                   local law that contains an anti-competitive provision unless Council complies with the
                                   procedures prescribed under a regulation for the review of an anti-competitive process.
                                   Section 15(3) states that the procedures to be complied with are set out in the National
                                   Competition Policy - Guidelines for Conducting Reviews on Anti-Competitive Provisions in
                                   Local Laws (Competition Policy Guidelines). A copy of the Competition Policy Guidelines
                                   is annexure B to these submissions.

                                   (b)      Under section 4 of the Competition Policy Guidelines, the review process must
                                   include "meaningful consultation with relevant businesses about the anti-competitive
                                   provisions".

                                   (c)      As set out at paragraph 2(a) above, the State Government is intending to remove
                                   the expiry date in its regulation. As such, there is no justification for Council to rush through
                                   the consultation process, particularly given the significant impact the proposed law will have
                                   on local business.

                                   (d)       WRIQ reserves fits rights to make future submissions in respect to the proposed
                                   local law and / or challenge the proposed local law on the basis that Council has failed to
                                   follow the Competition Policy Guidelines.

                                   4.       Conclusion

                                   Industry strongly objects to the enactment of the proposed local law. As set out above, such
                                   law is anti-competitive and fails to deliver or demonstrate any public benefit. Council has
                                   provided no evidence, research or statistical information, reports or other information that
                                   demonstrates the community imperative for the making of the law. Further, the proposed
                                   local law puts the Council in a position to continue to breach the competitive neutrality
                                   principle enshrined in the Local Government Act 2009, to which the Queensland
                                   Competition Authority has already determined should be attended to.

                                   Industry retains and reserves its rights to challenge the proposed local law on this basis.

  Waste Management                 WMAA does not support the proposed repeal of the Environmental Protection Regulation                The proposed local law:
  Association of Australia         2008, Chapter SA. It is our preference that this head of power remain within state                     is a replication of state legislation and is
  (WMAA)                           legislation to provide a consistent approach to the management and regulation of waste                  a lost opportunity for innovation.
                                   services, within all local government areas in Queensland. It is acknowledged that a                   objectives could be achieved through
  {redacted}                       uniform state -wide approach provides a better waste management solution for                            other mechanisms, such as contract
                                   government, the community and business. This repeal instigates a requirement for                        prescription.
  ‘is the national peak body for   incorporation of chapter SA provisions into individual local laws, which is considered
  all stakeholders in the waste    unnecessary administration to be undertaken by already overstretched Queensland                     No proposed actions.
  and resource recovery            Councils.

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  industry. We have over 2,000     In the event that the Queensland Government elects to continue with this repeal and          Refer response to issues 6 and 7 in table
  members nationally based in      Councils establish a head of power to manage domestic waste collection services, it is       2 (below).
  a broad range of business        strongly suggested that cutting and pasting the relevant sections from the expiring State
  organisations, all tiers of      legislation may be an opportunity lost in enabling innovation. By way of example and in
  government, universities and     referencing section 7 (Requirements for storing general waste in waste containers) of the
  NGOs. Our members are            draft local law, general waste, which includes recyclable organics waste, produced as a
  involved in the range of         result of ordinary use or occupation of the premises must be deposited in a standard
  important waste management       general waste container. This potentially precludes on site recycling such as composting
  and resource recovery            food scraps.
  activities within the economy,
  including community              Further, Council has the ability to manage the movement of trucks, placement of storage
  engagement and education,        bins, approval of waste infrastructure by mechanisms other than this Local Law, to achieve
  infrastructure investment and    its overall environmental and amenity objectives and that go some way to reducing waste in
  operations, collection,          order to achieve Queensland's waste reduction targets. Contract prescription, for example,
  manufacturing of valuable        could be used to this end.
  products from resource
  recovered materials, energy
  recovery and responsible
  management of residual
  materials.’

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Table 2 – Key matters and responses

 Issue 1 – The proposed local law is anti-competitive as it allows Council to create a monopoly over commercial waste collection
 services and will result in higher prices for consumers without a commensurate increase in quality or innovation.
 Council response:
Attachment A to the Public Interest Test Plan (the Plan) provides a list of the likely anti-competitive provisions included within the proposed
local law. The provisions replicate the current heads of power the Council has under the Environmental Protection Regulation 2008 and the
Waste Reduction and Recycling Regulation 2011, (the Acts). To the extent that the provisions of the proposed local law are anti-competitive,
Council is undertaking a review of the anti-competitive provisions in compliance with the requirements of the Local Government Act 2009 and
the Local Government Regulation 2012.
It was also stated in the responses received that the proposed local law violates the competitive neutrality principle. In that regards:
       Waste Services is considered a significant business activity for the purpose of section 45 of the Local Government Act 2009 (the
        LGA). Under section 44 of the LGA, the local government can apply the competitive neutrality principle through either
        ‘commercialisation of a significant business activity, or full cost pricing of a significant business activity’. Council applies the
        competitive neutrality principle through Waste Services being a full cost pricing business unit of Council.

       Waste Services applies the competitive neutrality principle in accordance with section 28 of the Local Government Regulation
        2012 (the LGR). The replication of the powers contained within the Acts into the proposed local law has not changed the nature of
        how Waste Services applies the competitive neutrality principle. For clarity, there is no intention on the part of Council to change its
        current approach in providing waste services within its local government area.

The claim that all businesses located in Councils jurisdiction currently pay on average 30 percent more for their waste services is unfounded.
Although some occupiers of commercial premises (most likely businesses considered attractive to private waste collection contractors due to
the volume and/or nature of waste generated) may enjoy reduced service costs under increased competition, for remaining occupiers utilising
Council’s service, service costs would inevitably increase because the same level of fixed costs would need to be recovered from a smaller
collections base. Owners of domestic premises which includes retirees, aged and invalid pensioners, should not be funding these increased
fixed costs which would be avoided by commercial premises serviced by private contractors.

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The proposed local law will achieve status quo and is aimed at replacing the expiring provisions contained within the State laws. The State
laws contemplate that Council may replace the expiring provisions with a local law.

Following the Queensland Competition Authority (QCA) ruling in 2012 that the Sunshine Coast Council was anti-competitive and after
considering the recommendations made by the Authority the Council disagreed with the ruling and recommendations. Given that the QCA
finding were recommendations and not enforceable at law, the Council voluntarily referred the matter to the ACCC to determine if the Council
was anticompetitive. The ACCC found that Council was not anticompetitive. Following de-amalgamation the Noosa Council has continued to
deliver waste collection services in accordance with the findings of the ACCC.

 Issue 2 – The proposed local law provides no public benefit in its introduction.
 Council response:
 The object of the proposed local law, as stated in the Plan, is to protect public health, safety and amenity related to waste management by:
    a. regulating the storage servicing and removal or waste; and
    b. regulating the disposal of waste at waste facilities; and
    c. ensuring that an act or omission does not result in:
           i.   harm to human health or safety or personal injury; or
           i.   property damage or loss of amenity; or
          ii.   environmental harm or environmental nuisance.
 Council currently achieves these objectives through the legislative provisions of chapter 5A of the Environmental Protection Regulation 2008
 and section 7 of the Waste Reduction and Recycling Regulation 2011 (the Acts). With the expiry of these provisions, which is due to occur
 on 1 July 2018, it has been necessary for Council to replicate these provisions within the proposed local law. The provisions specifically
 provide for Council to replace the provisions of the Acts in a local law. It is considered that the public interest of introducing the LL7
 outweighs the costs.


 Issue 3 – The proposed local law is anti-competitive and violates the competitive neutrality principle.


Attachment A to the Public Interest Test Plan (the Plan) provides a list of the likely anti-competitive provisions included within the proposed

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local law. The provisions replicate the current heads of power the Council has under the Acts. To the extent that the provisions of the
proposed local law are anti-competitive, Council is undertaking a review of the anti-competitive provisions in compliance with the
requirements of the Local Government Act 2009 and the Local Government Regulation 2012.
It was also stated in the responses received that the proposed local law violates the competitive neutrality principle. In that regards:
       Waste Services is considered a significant business activity for the purpose of section 45 of the Local Government Act 2009 (the
        LGA). Under section 44 of the LGA, the local government can apply the competitive neutrality principle through either
        ‘commercialisation of a significant business activity, or full cost pricing of a significant business activity’. Council applies the
        competitive neutrality principle through Waste Services being a full cost pricing business unit of Council.

       Waste Services applies the competitive neutrality principle in accordance with section 28 of the Local Government Regulation
        2012 (the LGR). The replication of the powers contained within the Acts into the proposed local law has not changed the nature of
        how Waste Services applies the competitive neutrality principle. For clarity, there is no intention on the part of Council to change its
        current approach in providing waste services within its local government area.

The proposed local law will achieve status quo and is aimed at replacing the expiring provisions contained within the State laws. The State
laws contemplate that Council may replace the expiring provisions with a local law.

Issue 4 – The proposed local law will impact on business environment and place restrictions on business ownership, structural
form, business behaviour or product / service quality.
The proposed local law will achieve status quo and is aimed at replacing the expiring provisions contained within the State laws. The State
laws contemplate that Council may replace the expiring provisions with a local law.

To be clear, it is not proposed that the proposed law will give Council any more ability than it currently has under the Acts to create a restriction
on competition.


Issue 5 – The proposed local law consultation process has not been adequate.

The consultation process that has been followed for the proposed local law has been in accordance with Council’s standard timeframe for the
making of local laws and subordinate local laws, a consultation period of 21 days. Also, the method of consultation complies with the
requirements of the LGR for the review of anti-competitive provisions. Given the 1 July 2018 expiry of regulations and that the overall purpose

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of the proposed local law is to replicate the powers contained within existing legislation that is due to expire, the standard consultation process
was considered appropriate in the circumstances.


Issue 6 – The proposed local law is a replication of state legislation and is a lost opportunity for innovation.

Council currently administers the expiring legislative provisions of chapter 5A of the Environmental Protection Regulation 2008 and is given
powers under section 7 of the Waste Reduction and Recycling Regulation 2011. The powers contained within these sections enable local
governments to undertake a local government function. Absent these provisions local governments can determine how their core functions are
regulated. The proposed local law is aimed at replacing the expiring provisions contained within the State laws. The State laws contemplate
that Council may replace the expiring provisions with a local law.


Issue 7 –The proposed local law objectives could be achieved through other mechanisms, such as contract prescription.



Council judiciously reconsidered the regulatory and non-regulatory alternatives available which may achieve the objectives of the proposed
local law. The following alternatives were considered to be ‘realistic’ alternatives and given further consideration:-
     regulation – public vs private action;
     public information and education programs;
     planning scheme.

Contract prescription was not considered ‘realistic’ due to its limited application, confidentiality and inability to achieve the objectives of the
local law.

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                                                                                                                ANNEXURE C
                                        State Interest Check Submissions Report

                              Noosa Council Local Law No. 7 (Waste Management) 2017


Consultation with the State Government occurred from 20 October to 17 November 2017. The following table outlines the State
Government entities that were contacted:

Department of Aboriginal and Torres Strait Islander Partnerships   Electoral Commission of Queensland
Department of Agriculture and Fisheries                            Department of Premier & Cabinet
Department of Communities, Child Safety and Disability Services    Department of Transport and Main Roads
Department of Education and Training                               Public Safety Business Agency
Department of Energy and Water Supply                              Queensland Rail Limited
Department of Environment and Heritage Protection                  Department of Science, Information Technology and Innovation
Department of Health                                               Queensland Audit Office
Department of Housing and Public Works                             Office of the Health Ombudsman
Queensland Police Service                                          Queensland Fire and Emergency Services
Department of Infrastructure, Local Government and Planning        Office of the Inspector General Emergency Management
Department of National Parks, Sport and Racing                     Office of the Energy and Water Ombudsman Queensland
Department of Natural Resources & Mines                            Department of Justice and Attorney-General
Queensland Treasury                                                Department of State Government
Department of Tourism, Major Events, Small Business &
Commonwealth Games

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List of State Government Agencies who responded with “No Comments” or “No Objections” to the proposed Local Law No. 7:

Department                                                   Response
Department of Natural Resource Management                    No comment/no objection to proposed Local Law No. 7
Queensland Health                                            No comment/no objection to proposed Local Law No. 7
National Parks Sport and Racing                              No comment/no objection to proposed Local Law No. 7
Department of Housing and Public Works                       No comment/no objection to proposed Local Law No. 7
Department of Infrastructure Local Government and Planning   No comment/no objection to proposed Local Law No. 7
Queensland Police                                            No comment/no objection to proposed Local Law No. 7

Industry Groups and Community Stakeholders Consulted:

Waste Management Association Australia                       Response submitted, refer to Public Interest Test Plan Report
Waste & Recycling Industry of Queensland                     Response submitted, refer to Public Interest Test Plan Report
Noosa Chamber of Commerce                                    No response
Cooroy Chamber of Commerce                                   No response
Noosa Community Biosphere Association                        No response
Cleanaway                                                    No response

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