A confidential report given to Bellingen Shire Councillors by their General Manager, and obtained by Coffs Coast Outlook, sheds much light on the recent arbitration decision in favour of Biomass over the Coffs Harbour City Council (CHCC) and the history behind this.
The story of the arbitration decision was first published here on August 19 last and highlights that the ultimate cost to CHCC ratepayers may potentially be as much as $31m.
By The Editor
The history (from the Bellingen Shire Council confidential report)
“In around 2006 Bellingen Shire Council (BSC) and Nambucca Valley (then Shire) Council (NVC) entered into contractual arrangements with Coffs Harbour City Council (CHCC) for the provision of mixed waste for processing. Coffs Harbour City Council in turn have a contractual arrangement for the provision and processing of mixed waste with Biomass Solutions Coffs Harbour Pty Ltd (Biomass). These arrangements are in addition to other contractual arrangements for processing of organics, and the collection and sorting of recyclable materials.
Mixed Waste Organic Output (MWOO) is the end product of a practice which aims to separate the organic waste in household red-lid bins from other waste. It was previously allowed to be applied as a soil amendment under strict controls. MWOO is produced at Alternative Waste Treatment (AWT) facilities, primarily to divert general household waste (red-lid bin) from landfill. The AWT for Coffs Coast Waste Services (CCWS) is located at Englands Road Coffs Harbour.
In October 2018 the NSW Environment Protection Authority (EPA) revoked the general and specific Resource Recovery Orders and Resource Recovery Exemptions for the application of MWOO to land due to risks associated with chemical and physical contaminants. It also introduced phase one of a Transition Package for the alternative waste treatment industry to ensure kerbside collection services would not be disrupted. During this phase additional transport and landfill costs were covered by the NSW Government.”
Did the CHCC ‘sit on their hands’?
It is understood that in spite of possibly having been told in 2010 that the Englands Road Waste Facility would be full by 2020, and in spite of being given two years from 2018 to find alternative sites and treatments for the MWOO issue, the CHCC prevaricated and in the eyes of some in the waste industry effectively ‘sat on their hands’ possibly because they were ‘hoping to win in Court’ later.
If correct this may go some way to explaining the situation that the CHCC now finds itself in relating to its current waste management woes
Once the state government MWOO transition support ceased the confidential report to the BSC states; ”it is understood that Coffs Harbour City Council and Biomass agreed to continue trucking the AWT output to Tamworth post cessation of the phase one funding in March 2020. There was no consultation with or formal advice to BSC or NVC in this regard. It is understood that this practice continues as of the time of writing this report.”
Our story was correct
The CCO story on 19 August and linked above was right. The confidential report to the Bellingen Shire Councillors two weeks ago makes this abundantly clear;
The BSC “is aware that a dispute between Biomass Solutions (Coffs Harbour) Pty Ltd and Coffs Harbour City Council (CHCC) in relation to an alleged $32m change in law claim concerning the EPA’s withdrawal of the exemption for the land application of the mixed waste organic output (MWOO) went to arbitration.
BSC and NVC have now been advised that the arbitrator’s determination was handed down in the week ending 14 August 2020.
On the morning of 17 August 2020 BSC and NVC received advice from Coffs Harbour City Council.
It is unclear why there is so much consideration of confidentiality when both parties could have agreed to make the findings public and there should have been a presumption, in the public interest, that they be made public.” (CCO understands Biomass is not opposed to the decision being made public)
“Aside the extensive advice about confidentiality there is some commentary about what is contained in the arbitrator’s determination and some rather impractical suggestions as to the information which can be conveyed to the public.
Relevantly for this Council clause 5 indicates that BSC is not entitled to have a copy of the Arbitrator’s determination (the Separate Award). So, this Council is plainly not a party to the agreement. This is of assistance in the event that BSC is unhappy with the implications of the Separate Award in terms of any additional costs this Council may be requested to pay for the processing and disposal of its mixed waste.
According to the advice, CHCC,
“is presumably free to announce to ratepayers that their rates will increase, if that is a consequence of the findings in the Separate Award”. (CCO emphasis added)
Also that CHCC “may be free to disclose to ratepayers, the Minister and others the effect of the Award, namely that the Revocation was not a change in law within the meaning of the Contract but the Council is required to pay Biomass’s “Increased Costs” and do the other things set out in the agreed orders, but this is more difficult to express a concluded view about …”
No way to treat your neighbours?
The confidential report to the BSC also highlights something CCO has suspected for a while.
Namely, that the CHCC treatment of our neighbours in Bellingen and Nambucca on this issue at least has not been particularly ‘neighbourly’. At least not over this issue over the past two years anyway.
The confidential report to Bellingen Councillors states;
“BSC and NVC have now made collective representations to Coffs Harbour City Council seeking a meeting of the respective Mayors, General Managers as well as the Director Sustainable Infrastructure at Coffs Harbour City Council who has been managing the legal dispute with their contractor Biomass. A copy of the letter seeking a meeting is attached. At the time of writing no formal response has been received nor is BSC or NVC aware there have been any media releases issued by the CHCC” despite drafts being provided.
Later on there is this ‘killer statement’ in the confidential report;
“BSC and NVC have over the past two years sought to proactively engage with CHCC in the matter in an endeavour to protect the interests of our council and community. Invariable (sic) our approaches have been disregarded and invariably no response is received to our correspondence. We have previously asked for a three-council briefing and this has never occurred. Our most recent correspondence again requests a three-council meeting. As outlined at the time of writing no response has been received. This will however continue to be pursued.”
Have CHCC Councillors been briefed on this decision against their council?
It would appear Councillors in at least one neighbouring CHCC council have been briefed on the implications of the outcome of Biomass v The CHCC.
Have Coffs Harbour City Councillors also been briefed yet? If not why not?
There is more, much more, in the BSC confidential report.