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This year is the 10th anniversary of the Russian WasteTech exhibition – looking back at the development of the exhibition how do you foresee the future?
The WasteTech exhibition has grown, both in floor space and with regard to the number of exhibitors. Those are positive signs and it shows an increased demand and interest from Russian customers for waste equipment and services. The main question though, is how this increased interest for the WasteTech Exhibition is reflected in the development of the Russian waste market? I would say that, unfortunately, the waste market as a whole is not reflecting that development. Nevertheless, I am optimistic that the waste sector will develop in the coming years.
What are the key challenges in developing the Russian waste sector?
As I said, the development of the Russian waste market is slow. I think that some of the reasons are:
- Russia has easily accessible and low-cost natural resources, and from an economic point of view there is not much interest in secondary raw materials or recycled materials
- there is a lack of a political will to change the Russian economy into a new model with a focus on ecology
- there is a lack of a regulatory and legal framework for waste management, and an absence of goals and tools.
The current global financial crisis has made the shortcomings of the Russian economy evident in general, as well as specifically in the waste sector. Global obstacles, such as low stock market indexes and limited access to credit, are slowing down the development of the waste market by national and global players. Besides this, there are our own chronic problems: underdeveloped environmental legislation, low political priority for environmental protection, cutting of environmental spending, limited municipal budgets, low cultural standards and the low environmental awareness of a significant part of the population. These form a complicated mesh of legislative, financial, technical and socio-cultural challenges. We have to cut through this tangle by tackling each of these issues simultaneously to solve our waste crisis.
The waste industry needs detailed ‘rules of the game’ at the federal level. Compared to this challenge, financial and technical challenges are secondary – business leaders will find money by themselves if they are motivated and there are clear rules of the game. There is a massive need for serious educational work and raising awareness, starting from kindergartens and schools and reaching out to all sectors of society. Only by raising public awareness can a public consensus be generated to increase budget spending to develop the waste management and recycling sector.
How do you see waste management in Russia developing in 10 years time?
Any prediction is usually harsh on the prophet’s foresight – who will read this prediction in 10 years’ time? I will try cautiously to imagine administrative, financial and technical changes related to waste and based upon this, make some assumptions. I would definitely include socio-cultural changes as one of the drivers for development of the waste sector. Without them, all attempts to change the situation in the Russian waste sector will be difficult!
For sure there will be technical improvements. We will see a change where labour will become more and more expensive through improved working conditions and increased social standards. This will raise interest in new recycling and waste treatment technologies which are less labour-intensive and respect occupational health requirements. Traditional machines and mechanisms will also undergo development. Businesses clearly understand that the ‘greedy guy pays twice.’
I have already mentioned the importance of legal reform and I trust this reform will be made within the coming 10 years. During the last two to three years several cases of ecological disaster in different regions of Russia have been highlighted. The High Tribunal has also judged a number of cases implementing the ‘polluter pays principle’. I see the development of media campaigns using ecological disasters to raise public awareness – mountains of waste, desert-death industrial landscapes will be common images on the TV.
With regards to the financial situation, the current crisis is not favourable to developing the waste sector. It is obvious that budgets are always limited. Even just in the last few months there have been significant cuts in federal, regional and local budgets. These cuts have also touched the environmental sector. Dozens of environmental projects have been mothballed or postponed. The rapid fall of industrial production has also stopped or postponed planned environmental projects. This is very disappointing, but the crisis will not last forever and, once the economy is stronger, financing for waste management and recycling projects will be available again.
Waste management is a capital-intensive industry – how can the financing of the industry be assured? How do you view the financing problem in relation to possible solutions and with regards to the financial situation of possible buyers?
Financing of small and medium-sized projects is the responsibility of individual businesses. But when speaking about big projects we cannot omit serious involvement from the political authorities (municipal and regional budgets). I am happy that despite legislative uncertainty in Russia, we can already see the use and development of new tools, such as public-private partnerships (PPP) for project implementation. The use of PPPs is under way in Moscow for the construction of waste incineration plants. Those pilot projects are serving to fine tune the new mechanisms of co-operation between political authorities and international investors for future projects.
I am also happy with the appearance of new waste companies doing business in several towns or regions, with the target to reach a national level of operation. These companies act as locomotives for re-equipping the waste sector and raising its technical and technological level. Recently a big German waste operations company signed co-operation agreements with several regions in Russia to carry out waste management services. I am sure that the appearance of other major international players will change the situation in the Russian waste and environmental sector.
We have been speaking about the future and leadership – what role can you see for ISWA in the future?
To me ISWA, through its members and their experiences, is strong in those areas that are important for Russia – institutional and legal reform. I have been listening to talks about the weakness of Russian environmental laws for at least a decade, but still there has been no real change. This is a sphere where ISWA and the experience among its working groups and members is of value to Russia. Today, I see a need in Russia to transfer and exchange experience among waste colleagues to prepare for the ‘critical mass’ needed to change the Russian waste sector! For sure, the lack of English language among waste sector professionals in Russia is a limiting factor, but this could be overcome by using internet resources and by translating ISWA material into Russian. Let us stay optimists!
Interviewer for the International Solid Waste Association (ISWA): Helena Bergman, ISWA Project Manager
e-mail:hb@iswa.dk
