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Report n°2: An integrated approach to economic and social contestability in business

Learning about contestation: challenging a business because of its waste products

We will assume that the recycling operator has suffered a "significant crisis" in the recent past, related to a change in the regulatory environment controlling the dumping of light shredder residue from the recyclers (SR). The residue is a by-product of crushing the raw material collected, and has no value.

Normally, residues from crushing contain a "metallic fraction" (of non-ferrous metals) and a non-metallic fraction consisting of foam rubber and fragments of rubber, plastic, textiles, etc. This non-metallic fraction is conventionally divided into two shredder residues, the heavy one and the light one.

In the past, the light shredder residue is dumped at a Class-2 landfill site, designated for non-dangerous waste. We will assume that it was this particular solution that at some point was called into question by the public authorities. From this point on, light SR is classed as dangerous waste, which means that the residues must be taken only to a Class 1 landfill site, reserved for dangerous waste.

Assume that at the moment there is no Class 1 site in the area around the recycling firm. Also assume that under the European Union's proximity principle for waste materials, operators are prohibited from carrying waste outside the region where it is produced. This means that the reclassification of light SR as dangerous waste prohibits the historic operator from both dumping waste in his own area and disposing of it in another area. Suddenly, the recycling business has the choice either of leaving the area or of storing the waste on site. Local storage can only be a very short-term expedient, and after that, the business is doomed. In addition, because significant amounts of waste would be stored at the business site, and because the waste is composed of very inflammable material with a high calorific value, this solution would quickly become a major risk both for the business itself and for residential areas nearby. The historic operator is thus faced with a crisis caused by the regulatory reclassification of light SR.

Let us suppose that the crisis is resolved by an arrangement with the public authorities that allows the SR in question to be transported outside the immediate area to the nearest Class 1 dump. The arrangement resolves the immediate crisis, but the operator considers it precarious as a solution, because it is a departure from normal practice, and hence may be queried subsequently. It also means increased transport costs that reduce the profitability of the business.

This experience of a crisis provoked by public measures intended to address the risks to the community from waste caused the recycler to be watchful in the future for other threats challenging his activity that would appear as environmental or health risks. He therefore chose to develop and extend his long-term view of waste-related risks to include those that may arise from all the production processes he uses and from all the by-products of the metal-recycling business. In doing so, he also considered what happens downstream, and tried and anticipated the various threats of social contestation that could make the dumps he uses as their targets. Another effect of taking this anticipatory approach is that the recycler broadened his strategic frame of reference: he extended his role beyond that of a simple agent forming one cell in the branch, to that of a mixed agent-regulator of that environment.

This anticipatory view of risks of itself requires work in three areas. The first is a systematic description and classification of the different waste products produced by the business; the second is the development, in relation with the supervising public authorities, of new methods of describing and classifying the waste products by type, to improve the objective analysis of the dangers they pose; the third is a research and development effort to develop alternative solutions to dumping for at least part of the SR, at an economically-acceptable cost.

The recycler may thus work proactively towards solutions to potential or actual problems posed by regulation concerning risks to the community that relate to his business in particular and to the branch of metal recycling in general. However, he will meet various stumbling blocks along the way. They touch access to sources of finance for research projects that look far enough ahead and address the relevant scientific and technical issues. In practice, the recycler will not be able to finance these research initiatives simply from the internal resources he has available. He will also be rather ignorant of the codes of practice and references used in technological research, and must become familiar with such a very different environment. The bad reputation the recycling business and the people in it have initially (because of the opacity of its business practices, and its minimal use of technology) will work against it in both areas. If the strategy is to look for a positive, innovative and modern solution to the threats of contestation to the business, these issues will be significant limitations, and the recycler will not overcome them alone.