Waste disposal and recovery facilities

SURETIES
Guarantees similar to contracts

WASTE DISPOSAL AND RECOVERY FACILITIES
SURETY GUARANTEES IN WASTE MANAGEMENT
On April 29, 2006, Legislative Decree No. 152 of April 3, 2006 (published in the Official Gazette No. 88 on April 14, 2006), known as the "Environmental Code," came into force.

The need to reorganize a constantly evolving area, with numerous accumulated legislative interventions over the years, as well as the need for adjustments to EU legislation, led to the issuance of the decree. This decree, particularly in parts four and six, regulates waste management, site reclamation, and compensatory protection against environmental damage, while repealing much of the previous legislation (including the Ronchi Decree and Article 18 of Law No. 349 of July 8, 1986).
The new legislation aims to protect and improve the quality of the environment and the health of citizens. It addresses the entire issue of waste management in an organized way, encompassing all activities related to the collection, transportation, recovery, disposal, monitoring, and securing of landfills and disposal facilities, once the treatment cycle of various types of waste is completed.
Under Article 184, waste is classified by origin into municipal waste and special waste, and by hazardousness into hazardous and non-hazardous waste.

Municipal Waste
a) Household waste, including bulky items from residential properties;
b) Non-hazardous waste from premises used for purposes other than residential, assimilated to municipal waste in terms of quality and quantity, as per Article 198, paragraph 2, letter g);
c) Waste from street cleaning;
d) Waste found on public roads, beaches, and riverbanks;
e) Plant waste from green areas.

Special Waste
a) Waste from agricultural and agro-industrial activities;
b) Waste from demolition, construction, and excavation activities;
c) Industrial waste, except as provided in Article 185;
d) Waste from artisanal, commercial, healthcare, and service activities;
e) Waste from waste recovery and disposal activities and water treatment;
f) Obsolete machinery and equipment, end-of-life motor vehicles, and their parts;
g) Fuel derived from waste;
h) Waste from mechanical sorting of municipal solid waste.

Hazardous Waste
Both municipal and special waste can be classified as "hazardous waste." These are listed in the "European Waste Catalogue" (EWC) and included in Annex D to Part IV of Legislative Decree 152/2006, which reproduces the text of the ministerial directive of April 9, 2002. Hazardous waste exhibits at least one of the following hazardous characteristics: explosive, oxidizing, flammable, highly flammable, irritant, harmful, toxic, carcinogenic, corrosive, infectious, teratogenic, mutagenic, eco-toxic, substances that release toxic gases when in contact with other elements, or substances that, after disposal, give rise to materials with the above characteristics.
The regulation of certain matters (such as reclamation activities, landfill management, and waste management) has been subject to specific local provisions, making the regulations complex and often applied inconsistently across the national territory.

GENERAL INFORMATION
Article 208 stipulates that those intending to construct or manage new waste disposal or recovery facilities, including hazardous waste, must submit a formal request to the competent Regional authority. After convening a service conference, if the evaluation is favorable, the project is approved, and authorization is granted for the construction and management of the facility.
The approval replaces any authorization issued by other entities and constitutes, where necessary, an amendment to the urban planning instrument, declaring public utility, urgency, and the inevitability of the works.

The authorization must include the following elements:
⦁ The types and quantities of waste to be disposed of or recovered;
⦁ The technical requirements of the site;
⦁ Safety and environmental hygiene precautions;
⦁ The location of the facility to be authorized;
⦁ The treatment and recovery method;
⦁ Requirements for securing, closing, and restoring the site;
⦁ The required financial guarantees;
⦁ The expiration date of the authorization;
⦁ Emission limits into the atmosphere for waste-to-energy processes.

The authorization lasts for 10 years and is renewable. A formal request must be submitted to the Region at least 180 days before the expiration. Activities can continue until a decision is made, provided that financial guarantees are extended.
If subsequent checks show that the conditions set out in the authorization are not met, it may be suspended for up to 12 months after a warning. If compliance is not achieved within this period, the authorization is revoked.

The issuing authority must include the authorization in a national register maintained by the National Register of Environmental Managers.

CONTENT AND SCOPE OF THE GUARANTEES
Under paragraph 11 of Article 208, the authorization issued by the Region must include the required financial guarantees, which must only be provided at the start of the facility's operations.

Financial guarantees for landfill management, including post-closure management, must comply with Article 14 of Legislative Decree 36/2003, which provides:

The guarantee for landfill activation and operational management, including closure procedures, ensures compliance with the conditions set out in the authorization. The amount of the guarantee is based on the authorized capacity of the landfill and its classification under Article 4. In the case of landfill authorization by sections (Article 10, paragraph 3), the guarantee can be provided in installments. The policy remains valid for two years after the closure is communicated by the competent territorial authority.
The guarantee for post-closure landfill management ensures that the procedures under Article 13 are carried out and is based on the total cost of post-operational management. For sectioned landfill authorization (Article 10, paragraph 3), the guarantee can be provided in installments. The policy remains in force for at least 30 years after the closure is communicated by the competent territorial authority.
A landfill is considered closed only after the final inspection by the issuing authority and the communication of closure to the operator. The operator, however, remains responsible for the maintenance of the landfill even in the post-operational management phase, as long as the landfill poses risks to the environment.
Due to the long-term nature of this policy, insurance companies will only be available if the beneficiary agrees to a policy with a fixed-term duration of 5 years (or 5+1 or 5+2) and with a clause stipulating that the guarantee is not enforceable if it is not renewed/extended at the expiry date.
Under paragraph 3 of Article 210 (which governs facility management in certain special cases), the authorization issued by the Region must include financial guarantees, if required by the current regulations, or equivalent guarantees. These guarantees are reduced by 50% for companies registered under Regulation (EC) No. 761/2001 of the European Parliament and of the Council of March 19, 2001 (EMAS), and by 40% for companies with environmental certification under Uni En Iso 14001.

Category
Contract guarantees

Group
Similar to those for contracts

Claim Payment
⦁ In accordance with a justified request from the Ministry of the Environment, the guarantor will pay
⦁ Within 30 days without raising objections for cases a) and b) in the Coverage paragraph (as was the case before)
⦁ After the compensation has been established by a final court decision for case c) in the Coverage paragraph (previously by simple request)

Legal References
Legislative Decree 13/01/2003 No. 36 implementing Directive 26/04/1999 No. 1999/31/EC
Ministry of the Environment Decree 13/03/2003 implementing Legislative Decree 36/2003
Legislative Decree 03/04/2006 No. 152, Article 208

Usual Contracting Party
Company active in waste management

Usual Beneficiary
Ministry of the Environment

Typical Initial Duration
⦁ The policy for operational management lasts for ten years (equal to the duration of the authorization), plus an additional two years to allow the Ministry of the Environment to carry out checks on the company's activities, limited to non-compliances that occurred during the ten-year period. The guarantee cannot be automatically renewed when the authorization is renewed.
⦁ The post-closure management guarantee will last five years, with no automatic renewal.

Extensions
None are provided

Termination
May be included depending on the guarantee text adopted by the relevant Region

Specific Clauses Normally Required
Specific text as determined by the relevant Region on a case-by-case basis.

Specific Documentation to Obtain
⦁ The company's application for authorization with the relevant attachments.
⦁ The issued authorization
⦁ Liability insurance for pollution damage