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WP 88896 1

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WP 88896 1

    WP 888/96

    1.10.99

    PRIVATIZATION OF SOLID WASTE MANAGEMENT SERVICES IN CITIES „99

    (Note submitted to hon. Supreme Court in October 1999)

1, The March 1999 Report on Solid Waste Management in Class 1 Cities, sub-

    mitted by the Expert Committee appointed by this hon’ble Court, has built upon, and gives practical shape to, a long series of Govt of India policy

    decisions on all aspects of Urban Solid Waste Management (USWM), beginning in 1944. Seven of the most recent Reports are listed in Anx A hereto, including the Bajaj Committee Report filed as Paper Book 2 of this WP 888/96.

2. ALL of these cited Reports, dating from 1992 onwards have, over the past 7

    years, consistently recommended that Municipalities shift from direct provision of

    SWM services to the playing of an enabling, facilitating & supervisory role instead.

    Anx A also lists selected quotations on the subject from each Report cited.

3. Yet despite these clear and repeated policy statements of Govt intent by

    four Ministries (Urban Development, Health, Finance and Environment) and

    the Planning Commission, the practical impediments to the implementation of

    their privatisation policy have not been addressed. E.g. in Report (2) of Anx A, on page 15, Shri G R Aloria, the Municipal Commissioner of Rajkot (cited as a model

    Respondent for its successful privatisation efforts) stated: “About 80% of the solid waste is collected and transported by private participation. SWM to the private sector is assigned on a tenure basis and only after assessing their

    efficiency and capability of dealing with the subject, the tenure is extended.

    However a few of the problems are encountered by Rajkot Municipality such

    as Labour Contract Act, monitoring of SWM activities by the private sector etc ”

4, The 13.8.99 Order of the Mumbai High Court in WP 1027/97, banning contract

    labour in the SWM Dept of Mumbai Municipal Corporation, is based on the

    existing provisions of The Contract Labour (Regulation and Abolition) Act of 1970

    (hereafter referred to as Contract Labour Act].

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    This Order and I.A. is a typical example of the existing legal impediments

    to the Government‟s own consistently - stated privatisation policy.

5, It is for this very reason that the Expert Committee, which includes four of

    India’s most successful city managers, has squarely addressed the need for legal clarity to overcome the problems of implementing the privatisation policy

    desired by Government and endorsed by every Class 1 City and State/UT. Some

    enabling provisions are required in the Contract Labour Act to permit privatisation.

    Not one Respondent has objected to Report para 4.13, which states:

“The Contract Labour (Regulation and Abolition Act) 1970 of the Govt. of

    India prohibits contracting out of any service which is being provided by

    the ULB through its own staff. In view of the felt need to encourage private

    sector participation in SWM services for the reasons mentioned in

    paragraph 4.11 above, it is recommended that the Govt. of India may

    consider suitable amendments to the aforesaid [Contract Labour] Act to

    facilitate NGOs and private sector participation in Solid Waste Management

    services in urban areas.”

6. Meanwhile, until such Amendment, the Report advises in para 4.12 :

    “NGO as well as Private sector participation may be encouraged in such

    a way that it does not affect the interests of the existing labour, it does

    not violate the provisions of the above law, does not exploit the

    private labour and yet reduces the burden of the urban local body. This

    will substantially help in improving the quality of service of the urban

    local bodies, effect economy in expenditure and also give scope to the

    private sector to enter the waste management market.” The Report’s recommendation in para 4.13 was also intended to facilitate the

    replication of the Best Practices described in Anx B hereto, and the need to

    balance the interests of the many with the interests of a few.

Inefficient SWM services by permanent-cadre non-performing sweepers, staff

    and/or officers daily threaten the health, life and livelihood of lakhs of their

     3 unorganised brethren and poorest urban citizens who suffer unhygienic

    urban living conditions. The resulting cost to slum-dwellers and others, of

    medical care, absence from school and work, and loss of infant, spouse or

    bread-winner, is incalculable.

This hon’ble Court, before taking a decision on the said I.A., may be pleased to

    seek a rapid response from the Chairman of the Committee, Mr Asim Barman,

    stating the Background Facts behind the Committee’s recommendation, the

    specific Best Practices it hopes to encourage, and any specific amendments that

    are deemed necessary for implementation of Government’s SWM policies.

    The hon’ble Court may also be pleased to express its views, and/or invite comment from the Labour Ministry, on whether or not the existing Contract

    Labour Act permits, or needs any amendment or enabling provisions to

    permit, the following specific activities in Solid Waste Management

    recommended in the Government’s earlier Reports cited in Anx A and in the

    present Committee’s Report:

(a) Individuals, housing societies, street committees, trade associations and

    apartment or commercial complexes, newly-urbanised areas and the like may

    hire persons, firms or organisations to collect, transport, process and dispose

    of the wastes from their areas.

(b) Municipalities may empower such civic-minded citizens and groups by paying

    them upto 80% of what it would otherwise cost the Municipality to provide such

    area-wise waste collection, transport, processing and / or disposal services

    directly, subject to there being no retrenchment of existing Municipal workers

    as a result and no abdication of Municipal responsibility for results.

(c) Municipalities shall be at liberty to consolidate and/or regroup all their available

    manpower resources in the interests of efficiency, or for more intensive area

    cleaning or market or night cleaning where required, and privatise the cleaning of

    the remaining areas, even where this task was performed, poorly or otherwise, by

    their own staff. This shall be subject to overall privatisation of upto 50% initially,

    to promote healthy competition between Municipal and outside workers.

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(d) Municipalities may promote public-private partnerships by any of the measures

    recommended in the Finance Ministry’s “Rakesh Mohan” Report (Ref. 7 above,

    vol 3 page 51 Anx 7.7; their Table is reproduced at the end of Anx A hereto).

(e) Such PPPs (Public-Private Partnerships) may be with entrepreneurs,

    cooperatives of rag-pickers or present or former conservancy workers, NGOs

    working for profit or without it, and similar innovative arrangements that may

    evolve countrywide over time.

This hon’ble Court may also wish to direct the Labour Ministry to consider the very

    atypical and dispersed working geography of conservancy workers in cities and

    include special provisions in existing legislation to provide a safe and acceptable

    working environment to private SWM workers and to safeguard them from

    exploitation without harming the interests of permanent labour.

    Petitioner seeks further Directions that whenever the Ministry of Labour drafts any fresh legislation regarding the working conditions of contract labour, it

    shall specifically address the subject of conservancy and sanitation service

    workers in Class 1 Cities.

    The Labour Ministry may be directed to then interact with the members of the Supreme-Court-appointed Expert Committee or with the Technology Mission

    for Clean Cities, who should thereafter, as was done in the present case, seek

    constructive inputs from a wide cross-section of city managers, concerned NGOs, social activists and union-leaders of both permanent and contract labourers and

    waste-collectors, through Regional Workshops and case studies, to evolve an

    acceptable countrywide consensus on this important subject.

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    WP 888/96 1.10.99 ANX A

GOVERNMENT POLICY STATEMENTS RE. PRIVATISATION OF SOLID

    WASTE MANAGEMENT SERVICES from 1992 onwards:

1 1992: PRIVATE PARTICIPATION IN MUNICIPAL SERVICE PROVISION

    AND INFRASTRUCTURE, Bombay, 30 April 1992, sponsored by Ministry of

    Urban Development, GoI + HDFC and ILFS.

Page 27: “there is very considerable scope for seeking economies in urban

    infrastructure investment …In view of the massive requirements for urban

    infrastructure investment, even relatively small percentage savings in costs

    can lead to the saving of hundreds of crores of rupees over a five year plan

    period.”

Exhibit 2: “Rationale for Alternatives: An important new philosophy is that

    city and county officials should take on a new role. Rather than act as

    service producers, local officials should become overseers, brokers or

    facilitators concerned with the provision of services regardless of how they

    are delivered. Officials should consider a spectrum of alternatives to

    service delivery to carry out overall local government policy. … local

    governments have held a monopoly in delivering services and therefore

    lack the motivation to reduce costs or improve performance.”

Chapter 2: “The local government may contract to have all or a portion of the

    services provided by the private firms [which] can avoid the bureaucratic problems inherent in local governments.”

    Session V. 1(a) para 7: “In many cases, it may be more efficient for government to provide resident associations with a grant and hand over

    responsibility to arrange with private firms for the service provision.

    Residents are often in a better position to monitor the efficiency of the

    private contractor in the delivery of the service than government which

    requires a complex and often expensive monitoring system” .

    2 1995: NATIONAL WORKSHOP ON SOLID WASTE MANAGEMENT, April 7-8

    1995, Ministry of Urban Affairs & Employment [=MOUAE] of GoI, + W.H.O.

Annex II Page 34: “Shri B S Minhas [Jt Secy (WA) in MOUAE] stated, “So, I

    would request all the Municipal authorities who are present here that they

    should make sincere efforts to privatise as many aspects of their municipal

    services especially those relating to solid waste management as possible. I

    understand that this is not an easy task. Especially in the beginning there

    will be lot of teething problems, opposition from the local labour unions but

    if a sincere effort is made, I am sure we can make some beginning.”

Annex III : Inaugural Address by Smt Sheila Kaul, Minister for Urban Affairs &

    Employment, page 38: “Economic reforms and the liberalisation processes have

     6 thrown up several opportunities which we should take advantage of. We now

    need to create a conducive environment for enabling substantial private

    investments in this sector. Legal and procedural hurdles should be

    smoothened out. Services like Solid Waste Management, water supply etc

    cannot be efficiently managed unless paid for through user charges. It is only

    then that private investors would have the confidence to invest in this sector.”

    Annex V Dr J P Singh, Secretary, MOUAE page 47: “It is also estimated that the municipalities spend about Rs 130 to Rs 260 per ton of solid waste for

    collection, transportation and disposal. About 67% of this amount is spent

    on collection alone.” Page 51 “The private sector has the potential to

    increase significantly the efficiency of solid waste service delivery [and] is

    much more efficient than the municipal collection system. Contract

    collection was found to be about 35% less costly than the municipal

    collection for comparable service. … Contracting out part of the services

    should be done … to create a competition.”

    Annex VI page 58: Draft Recommendations “14. Privatisation should be

    encouraged and the work contracted out in the places of commercial

    establishments and industrial areas.”

    Annex X Final Recommendations: “8. Recognising that various activities

    of Solid Waste Management can be effectively carried out by the private

    sector in a competitive environment, congenial environment should be

    created for the private sector participation in Solid Waste Management by

    introducing tax holidays, accelerated depreciation, user charges and

    increased transparency in the transactions. … 13. Central govt should formulate guidelines and regulatory framework for

    attracting and encouraging private capital into the Solid Waste Management

    through BOO, BOT, BOLT and other arrangements.”

3 1995: WORKSHOP ON SANITATION AND ENVIRONMENTAL HYGIENE ON

    THE LINES OF A TECHNOLOGY MISSION, 10-12 April 1995, National

    Institute of Communicable Diseases, Dir-Gen of Health Services, Ministry of

    Health & Family Welfare, GoI, + W.H.O.

    Page 99: “The mechanism of collection, transportation and disposal may be offloaded to private agencies”

4 1995: NATIONAL MISSION ON ENVIRONMENTAL HEALTH & SANITA-

    TION, July 1995 , Dept of Health in Ministry of Health & Family Welfare, GoI.

5 1995: REPORT OF HIGH POWER COMMITTEE : URBAN SOLID WASTE

    MANAGEMENT IN INDIA, Planning Commission, GoI, June 1995. (This is the

    excellent “Bajaj Committee” Report filed as Paper Book 2 in WP888/96).

    “Collection & Transport Para 2.4.14 : The existing system of Municipal Corporations / Municipalities arranging collection through their health /

    conservancy departments is not effective and satisfactory in most places.

    Participation by local citizens committees, NGOs and private organisations

    is needed for ensuring effective garbage collection and transportation.”

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    6 1996: MANUAL ON SOLID WASTE MANAGEMENT, November 1996 by

    NEERI + Ministry of Urban affairs & Employment, GoI.

7 1996: THE INDIA INFRASTRUCTURE REPORT, by the Finance Ministry

    (Dept of Economic Affairs)’ Expert Group on the Commercialisation of

    Infrastructure Projects [more famous as the “Rakesh Mohan Report”]:

Vol 1 page 2: “There is, today, considerable doubt about Government‟s

    ability to supply infrastructure services efficiently.”

    Vol 1 p. 28: “ Cost minimisation needs appropriate technology, proper attention to maintenance, curbing misuse of services, efficient service

    provision. … “waste in each Indian city gets recycled by ragpickers…

    Sanitation: …SWD services can be unbundled and most functions entrusted

    to the private sector. This is one area where privatisation has shown

    consistent productivity gains and cost reductions. ”

    Vol 1 p 30: “We Recommend… Urban infrastructure: Public-Private Partnerships (P-P-P) be adopted for the present. … Solid waste disposal

    can be privatised fully. … The cost of collection, treatment and disposal of

    the solid waste be reduced. Greater attention to segregation of different

    kinds of waste at the collection point itself will reduce cost of disposal.

    Wherever environmentally acceptable, disposal can be decentralised to

    save on transportation cost. … In solid waste management, the “polluter

    pays” principle be aplied. … The property tax base be freed from the Rent

    Control Act … The ULB be responsible for providing all infrastructure in the

    city area. The multiple agencies in charge of providing various services

    should be merged under the ULB. ”

    Vol III Sector Reports page 41 “Since privatisation or public-private partnerships will be a first-time experience for most administrators, the

    requisite skills must be imparted to them.”

Vol III Sector Reports page 51 : Annex 7.7

    ACTIVITY COMMERCIALISATION AGENCIES INVOLVED

    PROSPECTS

    Local bodies, private firms, co-Road Sweeping Contractual agreement with private

    operatives, NGOs, CBOs. firms, cooperative and NGOs

    Solid Waste Leasing or contract, levy of Local bodies, coopera-Collection collection fees from households, tives of waste workers /

    commercial establishments, etc ragpickers, NGOs and

    private entrepreneurs Solid Waste Leasing to private contractors, Local bodies, industries,

     Transportation saving of cost possible due to private concerns

    improved efficiency

    Solid waste Material recovery, biogas production from Local bodies, Treatment & landfills & anaerobic decomposition, industries, Disposal production of compost & RDF, marketing private concerns.

    of material and energy recovered.

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    Annexure B

WP 888/96 SWM “BEST PRACTICES” DESERVING REPLICATION

The Supreme-Court-appointed Expert Committee took note of the following

    numerous non-exploitative, employment-generating and successful city-cleaning

    initiatives observed countrywide and described below, which deserve replication

    but might fall in a grey area for want of clarity in the Contract Labour Act.

(i) In innumerable cities, urban residents have responded to unsatisfactory

    waste-management services by creating and evolving their own systems,

    based on a small monthly fee of Rs 10-25 per household /shop per month.

(ii) Generally, unemployed entrepreneurs go round neighbourhoods or

    commercial streets door-to-door with handcarts, autos or small trucks,

    collecting waste at the doorstep and depositing it at the nearest major

    Municipal collection-point or dumping it outside the city. This is

    commonest in unserved outlying areas. Municipalities are now encouraging

    them to transport the waste directly to designated waste-processing and

    disposal sites to avoid manual handling and double handling of wastes, as

    recommended in all the above-cited Reports, and by the said Committee.

(iii) Numerous NGOs everywhere are promoting this practice as a way of

    upgrading waste-pickers from filthy dustbin-rummaging to hygienic

    doorstep collection, and providing steady income to many of the poorest.

(iv) Many citizen groups everywhere have progressed to neighbourhood

    composting (described in Anx F of the Committee’s Report). In Mumbai

    alone, 200,000 residents in 110 societies are reported to have become

    "zero-garbage neighbourhoods" that today put out into the Municipal bins

    only 8-10% of their former waste quantities, at truly enormous annual

    collection and transport savings to the Municipality.

(v) Because of this, Mumbai is pro-actively encouraging, promoting and

    liaising with such groups practising “ALM” (Advanced Locality

    Management), with an Officer on Special Duty and a vermi-/composting

    expert appointed exclusively to provide them official support.

(vi) Many more such groups countrywide are willing to take on local waste-

    management if the Municipality provides them even 80% of what it

    currently spends on their area every month. This is a win-win situation

    for both parties and has been recommended in Ref. 1 Session V. 1(a)

    para 7: “In many cases, it may be more efficient for government to

    provide resident associations with a grant and hand over

    responsibility to arrange with private firms for the service provision.

    Residents are often in a better position to monitor the efficiency of

    the private contractor in the delivery of the service than government

    which requires a complex and often expensive monitoring system.”

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    (vii) Some Municipalities have already begun adopting the recommendations of

    the Interim Report, and have started after June 1998 to implement

    decentralised door-step collection and transport of wastes either by

    Municipal workers or by others. This had already begun earlier in many

    cities for collection of hospital wastes, as a fallout of the recent Biomedical

    Waste (Management & Handling) Rules 1998.

(viii) Some cities have significantly improved their waste collection and transport

    services by consolidating their existing conservancy work-force and

    strengthening it in some Wards, and officially privatising this work in the

    remaining Wards with suitable safeguards against both exploitation and

    non-performance. Rajkot is the leader in this, with 80% of all services

    privatised at considerable cost savings combined with better service.

(ix) Another very good example is in Hyderabad, where tender invitations for

    privatised cleaning of standard “Units” of area / waste quantity (assigned

    by lots) specify the wages, benefits, safety measures, performance

    standards and supervision levels required of private conservancy services

    in each such Unit area. Certification of work quality by local residents, and

    deduction of payments for poor performance in a variety of ways, are built

    into the contracts.

To prevent any set-back to all these positive developments, clarification is

    necessary and desirable as to whether the Order dt 13.8.99 of the hon’ble

    Mumbai High Court in WP 1027 of 1997 which states that “(a) The system of

    employing contract labour on the work in Solid Waste Management Department

    shall be discontinued by the first Respondent Corporation with immediate effect"

    does or does not affect all the above progressive measures.

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