Federal law on garbage removal from home from the private sector: features

The Internet contains a lot of information about the sharp increase in garbage collection tariffs for both residents of apartment buildings and private homeowners, as well as those living in rural areas. Until now, some media outlets are reporting that fees for solid waste removal have increased hundreds of times, thereby generating heated discussions among netizens. In this article we will look at what innovations came into force in January 2021, what is relevant now and how much we will have to pay for garbage in 2021.

New rules for the removal of waste from individual households

A new public service for owners of private houses - waste removal.
Responsibilities for the removal and disposal of waste from the private sector fall on the shoulders of regional operators. The operator - there may be one or several depending on the needs of the population - is selected on a competitive basis, and its services are charged in accordance with local legislation.

According to the federal solid waste management program, the regional operator must ensure:

collection,
transportation,
processing,
sorting,
recycling,
neutralization,
disposal of solid household waste.

According to the new rules governing the removal of waste from a private home, all households must be equipped or have access to special areas with containers for waste collection. It should also be noted that, according to Law No. 89-FZ, the homeowner does not have the right to evade paying for this utility service, even on the basis that he disposes of the garbage himself.

This point became a real stumbling block between the owners of private houses and housing and communal services, as many owners refused to pay, preferring to sort and dispose of solid waste from their own plots themselves. However, the law in this matter is on the side of the housing and communal services, and in case of non-payment for the MSW removal service, the amount can be recovered in court.

The rules provide for owners the right to choose a scheme for the removal and disposal of MSW from the private sector.

The traditional scheme is that all waste is taken by the owner to a nearby waste collection site and stored in the containers provided for this purpose. This scheme has a number of disadvantages, including the inability to track who exactly fills garbage cans, as well as the opportunity for careless owners to dump construction waste that is not related to MSW onto container sites.

Traditional waste collection Individual waste collection scheme

Individual scheme - each homeowner independently places bags or bins of garbage near the house, which are subsequently collected by a special vehicle. This scheme is used if there is no space to equip a special site or its creation is impractical. Also, leaving trash in bags and boxes can attract wild animals and birds.

“Waste reform” in Russia: financing issues

One of the main goals of the so-called “garbage reform” that began in 2021 is to create sufficient production capacity for the processing and disposal of solid household (municipal) waste (hereinafter referred to as “ MSW ”).

In addition to organizational and administrative measures, the most important role in achieving the stated goal is played by financial support for the implementation of the reform.

This article will review existing sources and forms of project financing, as well as recently announced additional support measures.

This article is a continuation of our series of materials on the topic of “garbage reform”. See links to previous publications below.

Main sources of financing for “garbage reform”

According to various estimates, at the time of the start of the reform, the share of MSW intended for processing was no more than 3% of the total volume of generated MSW. The remaining waste remained unprocessed and was transported to landfills for disposal. During the reform, it is planned to increase the specified share of processed MSW to 60% by 2024.

Another target for “garbage reform” is the commissioning of 37.1 million tons of MSW processing capacity by 2024.

According to public law, specially created in 2021 to coordinate and ensure the implementation of measures in the field of MSW management (hereinafter referred to as the “ Russian Environmental Operator ”), the creation of the necessary infrastructure for MSW management will require more than 400 billion rubles.

According to the report of the Minister of Natural Resources and Environment, in 2019, 55 MSW processing facilities were built in Russia with a capacity of 6.4 million tons per year in 33 regions of the country. At the same time, the total investment amounted to 28 billion rubles.

Several components of financial support for the implementation of the reform and achievement of the above goals can be identified:

budget investments at the federal and regional levels;

tariffs paid by the population and legal entities;

environmental levy levied on manufacturers and importers of goods under the existing extended liability system);

private investment, including in various forms of joint participation in projects with the state.

Despite the presence of several possible sources of financing, we can generally speak of its insufficiency at the current stage of reform implementation, which jeopardizes the achievement of the stated goals.

For example, as a result of a sharp increase in tariffs at the start of the reform, their collection rate decreased. According to the Russian Environmental Operator, by the spring of 2021, the total amount of debt to regional operators throughout the country reached 50 billion rubles. In fact, actual revenues from tariffs only cover (and then partially) the current activities of operators. Obviously, in such a situation there is no need to talk about any investment in the creation of new production capacities.

The EPR system is also ineffective. Thus, the total amount of funds collected under the EPR in Russia in 2018–2019 did not exceed 3 billion rubles (although according to forecasts, the volume of environmental collection should have been about 30 billion rubles). This amount is also not enough to implement the necessary projects.

The main source of financing for projects to create infrastructure for the treatment and disposal of MSW remains the federal budget. However, it does not provide for full financing, but, on the contrary, it is proposed to more actively attract private investors with a gradual reduction in the share of state participation. Moreover, even the investment funds included in the federal budget for 2019–2020 remain unused or are used to support regional operators during the pandemic.

Thus, there is an urgent issue of attracting private investment in the creation of facilities for the processing and disposal of MSW with the possibility of subsequent arrangement of eco-technoparks on their basis. Another direction is investing in the construction of waste incineration plants.

Existing forms of financing

Federal level

As mentioned above, at the moment it is stipulated that the main source of funding is federal subsidies. Subsidies are provided from the federal budget in the form of a property contribution of the Russian Federation to the property of the Russian environmental operator.

Further, project financing is provided by the Russian environmental operator in the following forms:

participation in the authorized capital of investors;

issue of bonds, acquisition of said securities and disposal of them;

provision of guarantees and guarantees for loans, borrowings and other obligations of investors;

participation in concession agreements, public-private or municipal-private partnership agreements.

The condition for providing financing is that the investor meets the following requirements:

the investor does not have an outstanding obligation to pay taxes, fees, insurance premiums, penalties, fines, interest and other obligatory payments;

the investor has no overdue debt to return subsidies, budget investments and other overdue debt to the federal budget to the federal budget;

the investor is not in the process of reorganization, liquidation, or bankruptcy;

the investor does not receive funds from the federal budget on the basis of other regulatory legal acts for purposes related to waste treatment and disposal.

An indicator of the effectiveness of financing is the achievement of a ratio between the amount of attracted private investment (including in the form of the investor’s own and borrowed (credit) funds) and the amount of the provided subsidy at a level of at least 2.46 rubles of private investment to 1 ruble of subsidy.

However, as noted in the report of the Accounts Chamber of the Russian Federation, none of the above possible forms of project financing from the Russian environmental operator are in demand by investors.

At the moment, there is also no information about any investments by the Russian environmental operator in MSW management projects. Plans announced in mid-July 2021 to invest 2.5 billion rubles in three waste sorting projects in the Moscow region were never implemented.

At the same time, to attract investors, the Russian environmental operator plans to develop package proposals for investments in the waste management industry, as well as issue so-called “green” bonds.

There are other measures to support investors at the federal level in the form of maintaining the rate of payment for negative environmental impact at the 2021 level, exempting regional operators from paying VAT, as well as providing the opportunity to use solid waste disposal facilities that were put into operation before January 1, 2021 and not having the documentation required in accordance with current legislation. However, none of these measures are sufficiently effective. For example, maintaining the amount of payment for negative impact on the environment at the same level cannot compensate for the high costs of investors for creating infrastructure, and the exemption of regional operators from VAT does not allow them to take into account the amounts they paid for goods, works and services of their suppliers and subcontractors.

Regional level

Some constituent entities of the Russian Federation have adopted regional programs in the field of waste management, including MSW, which provide for investment programs of regional operators for MSW management as support measures. For example, such investment programs have been approved in the Kemerovo region and the Republic of Kalmykia in relation to supporting the corresponding regional operators.

It is obvious, however, that this type of support for investment activities cannot be called universal and effective, since it is aimed at specific market participants (regional operators), and the amount of support provided to them largely depends on the financial condition and well-being of the corresponding region in a particular period of time.

Private investment

Against the background of the general ineffectiveness of government financing of projects, one can observe a certain interest in the industry among “parastatal” structures (for example, RDIF, Sberbank, Rosatom State Corporation, VEB.RF).

An example is the conclusion between RDIF, Sberbank and a foreign investor of an agreement to invest in the construction of a waste sorting and disposal complex in the Kaliningrad region through the acquisition of shares in the authorized capital of the corresponding company, which has entered into a concession agreement with the regional government for a period of 25 years.

Another example is an investment company that is already building 5 waste incineration plants in the Moscow region and Kazan with a total cost of more than 150 billion rubles and in May 2021 agreed with Rosatom State Corporation, as well as a syndicate of banks with the participation of VEB.RF on the construction of another 25 such plants throughout the country . The cost of this new project is estimated at 600 billion rubles, of which 200 billion rubles will be provided by VEB.RF.

In total, according to the Ministry of Natural Resources, 72 concession agreements worth 51 billion rubles have already been concluded. According to the department’s forecasts, by the end of 2021, another 10 agreements worth 10 billion rubles should be signed.

Thus, due to the low efficiency of existing government support measures, at the moment, investment projects in the field of solid waste management are implemented mainly by attracting banks, state corporations and investment funds as co-investors.

New support measures

In September 2021, the Government of the Russian Federation announced the expansion of the powers of the Russian Environmental Operator to finance projects for the treatment and disposal of MSW. The Russian Ministry of Finance and the Russian Ministry of Natural Resources, together with the Russian environmental operator, were instructed to develop measures to support investment projects in this area.

The planned new support measures represent the vesting of the Russian environmental operator with the following additional powers:

purchasing bonds with a rate of 50% of the key rate of the Bank of Russia and providing loans to investors;

compensation of costs incurred for the construction and reconstruction of infrastructure facilities, as well as leasing of main technological equipment, and partially - interest rates on loans aimed at creating infrastructure;

providing subsidies to hard-to-reach and sparsely populated areas for the creation of MSW processing facilities.

In addition, draft amendments to tax legislation have been published, according to which it is proposed to provide the following tax benefits to regional operators for the management of solid waste:

from 2021, introduce a zero VAT rate on the services of regional operators provided to citizens (as noted above, the current VAT exemption is ineffective);

exempt from paying income tax the transfer of their chosen recyclable materials (this should also reduce the cost and increase the competitiveness of products made from recyclable materials);

exempt garbage trucks from transport tax (currently the cost of transporting solid waste is up to 70% of operators’ costs);

establish for 5 years after commissioning a zero property tax rate on MSW processing and disposal facilities and reduced social insurance contributions.

Market participants assess the proposed new support measures positively, while noting that it is also necessary to work out tariffs for the management of MSW, since the main income (and return on investment) will come from them.

Conclusion

One of the key problems in the implementation of “garbage reform” is its insufficient funding, both from the state and from private investors.

In the case of government support, we can rather talk about problems in the administration of allocated funds and inconsistency between their managers against the backdrop of the lack of a unified approach to the selection of priority projects for such support. Private investors are deterred by the lack of guarantee of income and return of invested funds due to the limited possibility of increasing existing tariffs.

At the same time, the need for the implementation of projects in the field of processing and disposal of MSW is still high, primarily in relation to the creation of waste sorting and recycling complexes and related infrastructure, as well as the supply and installation of the necessary equipment.

In this regard, it is of particular importance to attract a reliable public law partner and financing organization to participate in projects, including through the conclusion of appropriate concession agreements or public-private or municipal-private partnership agreements, the terms of which, on the one hand, make it possible to ensure sustainable financing of projects, and on the other hand, to guarantee a certain level of profitability.

For more information, please contact CMS Russia experts Dr. Thomas Heidemann , Dmitry Bogdanov or your regular contact at CMS Russia.

Is it necessary to enter into an agreement?

From the moment an agreement is concluded between the executive body of a constituent entity of the Russian Federation and an operator selected on a competitive basis that carries out operations with MSW of private and other landholdings, the latter must send out service agreement forms to homeowners. However, even if they are not signed, from the beginning of the operator’s actual performance of his duties, the service is considered provided and its cost is included in the payment of housing and communal services.

If in a particular subject an agreement has not been concluded between the executive committee and the operator, the owner has the right to choose an organization with a license for the removal of solid waste and enter into an agreement with it for the provision of this service.

If the regional operator does not provide waste removal services, does not provide them in full, or the quality of services does not meet legal requirements, the owner has the right to file a complaint with Roskomnadzor and the district departments of the Prosecutor's Office.

Disposal of solid household waste: what has changed in the legislation

Law No. 89-FZ was supposed to change the existing system of collection, disposal and storage of household waste. The new procedure for handling MSW is carried out through a single regional operator, and not through a management company.

Payment for waste removal is now considered a mandatory public service. Payment in most regions from 2021 depends on the number of residents. Before the reform, calculations were carried out based on the area of the premises. The location for collecting MSW in 2021 is determined individually for each home. Regional authorities must calculate the consumption rate and the number of containers located in the local area. The new tariffs include costs for the disposal of solid waste, the construction of processing plants and new landfills, and measures to protect the environment and the ozone layer.

According to the new regulations, municipal waste must be sorted and disposed of separately by category. At the moment, separate waste collection is not carried out in all regions. The transition to such a collection turned out to be technically difficult.

How to conclude an agreement for waste removal from a private household

The standard form of an agreement for the provision of services for the removal of solid waste is presented in paragraph 5 of Article 24.7 of Law No. 89-F3. The contract must indicate:

Name and details of the organization that is a regional operator for the removal of municipal waste, its legal address.
Passport data of the customer of the service - last name, first name, patronymic, place of registration and residential address.
Responsibilities of the operator's organization (collection, transportation, processing, neutralization, disposal and disposal of waste), collection location and scope of work performed. The operator’s responsibilities also include timely response to customer complaints about improper performance of services, monitoring the safety of containers and the condition of container sites.
Responsibilities of the customer: payment for the service on time according to the tariff established by the local executive committee, storage of waste strictly in the places provided for this, responsibility for the safety of containers, etc.

The exact location of the waste storage area along with a diagram, as well as an indication of the type of storage (bags, bins, containers, bunkers, etc.).
The opportunity for the customer and the contractor to verify, record and control the services provided once every six months.
Duration of the contract. As a rule, the contract is valid as long as the agreement between the service operator and the municipal authorities is in force.
Place and time of conclusion of the contract.
Signatures of all parties.

Sample contract for solid waste removal (page 1) Sample contract for solid waste removal (page 2) Sample contract for solid waste removal (page 3)

According to the new law, the MSW removal operator appointed on a competitive basis is required to submit an exact layout of waste collection points to local authorities, and any homeowner has the right to access this layout, indicating the nature and volume of storage areas for review purposes. This point was created to control and prevent the formation of spontaneous landfills and unauthorized waste disposal.

Rules for handling MSW, innovations

The Decree of the Government of the Russian Federation established the rules for waste removal, including:

procedure for concluding an agreement for the provision of waste management services;
the procedure for their transportation;
disposal procedure, disposal safety;
grounds on which an organization can be deprived of the right to engage in waste removal.

From 2021, the management of MSW on the territory of each subject must be provided by a regional operator in accordance with the regional (territorial) waste removal program. Only one operator must be selected based on the results of the competition, or there may be several. This is decided at the local level, based on the needs of the population.

Tariffs are also determined by local authorities , who prepare a waste management scheme that must be followed by operators providing their services on the basis of contracts concluded with consumers.

The rules regulate the responsibilities of regional operators who must, in strict compliance with laws regarding the preservation of the environment, collect, transport, process, dispose of, neutralize and dispose of solid waste. The operator does all this independently or with the involvement of other operators if necessary.

Thus, an agreement must be concluded between the executive body of the subject and the operator, according to which the organization becomes authorized to provide waste removal services in the region. In turn, the operator is obliged to take measures to conclude an agreement with consumers, to whom he must send forms. If your region does not have an agreement with a regional operator, you have the right to enter into an agreement with other organizations if they have a license.

For example, the Decree of the Government of the Moscow Region dated December 26, 2016 No. 999-47 “On the content and procedure for concluding an agreement between the authorized executive body of state power of the Moscow Region and the regional operator for the management of municipal solid waste” approved the procedure for collecting, transporting, and recycling waste on the territory of the Moscow Region. areas. It provides for the rights and obligations of the parties and regulates actions to provide the relevant service. Based on this agreement, the operator must enter into contracts with citizens.

However, a written form of the agreement is optional . Thus, according to the Letter of the Ministry of Construction of Russia dated October 16, 2018, the beginning of the operator’s work should be considered the date of signing the agreement between him and the municipality. From this moment on, the owners of residential premises pay for the work of the service provider, even without drawing up a separate document.

At the same time, the operator is obliged to consider complaints about improper provision of services, and many seek to conclude a written agreement that clearly states the rights and obligations of the parties. An agreement is also needed in cases where the municipality has not prepared an agreement and there is no regional operator in the subject.

What should be the fee for garbage removal?

It is not possible to say exactly how much the service for removing MSW from the private sector will cost:

Each individual region of the Russian Federation has its own tariffs for housing and communal services,
tariffs may change due to changes in the economic situation in the region and in the country as a whole.

The cost of the service must be clarified by the owner either with the executive authorities or with the operating organization. The administration of the region (city, town or other type of settlement) also reserves the right to establish a tariff scheme for the service: payment per resident, per square meter or per household.

Legal nuances

Burning garbage does not exempt you from paying.
Tariffing and payment for garbage removal from private households, like any other service, has its own nuances:

The absence of garbage, as well as the fact that no one lives in the house for a long time and nothing needs to be removed, is not a reason for non-payment for the service provided.
Even if you did not enter into an agreement, but the service was actually provided, you must pay for it according to the local tariff.
Even if no one is registered in a private house, the fee is charged to the owner of the property.
If the service was provided in an incomplete volume or of inadequate quality, payment must be made, but then you should file a complaint with the Criminal Code for a recalculation.

Burning debris, branches and leaves on a property is a violation of fire safety laws and does not relieve the owner from having to pay.

How to reduce waste

Unfortunately, innovations in legislation do not in any way encourage the owners of suburban housing to reduce the volume of garbage removed, nor the desire to sort the garbage and take it to recycling points. However, it is within the power of any conscientious citizen to take care of the ecology of the place where he lives, including by reducing the potential volume of household waste. There are several ways to reduce the amount of waste produced:

Food waste, properly selected and crushed, can be used as feed for farm animals.
Dry leaves, grass, and food waste can be processed into compost and serve as fertilizer for plants in the garden.
Cut trees, crushed into sawdust, can serve as mulch and covering material for plantings.
Renewable waste - paper, plastic, scrap metal - is accepted in many regions at recycling points; in some cases, a reward is provided for collecting and sorting waste.

Food waste and leaves can be a good fertilizer
Changes in the housing legislation of the Russian Federation regarding the removal and disposal of garbage from private houses came into force in January of this year, making payment for this type of service mandatory for every owner of a country house or plot of land, which is not perceived positively by all owners . However, it is up to everyone to monitor the quality of their implementation. If the designated organization does not perform its duties properly, the owner has the right to recalculate or terminate the contract.