Abstract

In recent years, municipal economic activities have undergone considerable changes. Particularly due to market access liberalization in many fields, services of general economic interest are no longer part of the undisputed realm of official bodies. Dividing tasks between privately owned, profit-oriented enterprises and public authorities has become a fundamental issue of governance. Moreover, static and fixed notions of how to assign responsibilities in these sectors may be not sufficiently resilient to respond to dynamic effects such as the volatility of markets. The paper discusses the inherent difficulties by drawing on a controversy in Germany in the field of waste management.

German waste management law has long departed from just curbing risks that typically result from unorganized waste disposal. Pursuant to the Waste Disposal and Recycling Management Act of 1996, German waste disposal policies follow two equally important objectives. First, legal provisions are designed to ensure orderly waste disposal by public authorities, in practice by municipalities and local communities. Alongside this classic end of waste management regulation, the Waste Disposal and Recycling Management Act establish a system that is meant to allow for and encourage waste recycling. Under the current regime, privately owned companies are entitled to handle waste materials that could be utilized for any substantial purpose other than just disposal. One of the dividing lines between those two areas is drawn by Sec. 13 of the Waste Disposal and Recycling Management Act. The provision stipulates that waste collected from private households has to be ceded to “public disposal bodies”, e.g. to municipalities. However, this obligation (“Überlassungspflicht”) does not apply to cases in which (1) household waste can be properly disposed of by commercial collection, and (2) “predominant public interests“ do not require transferral to public disposal bodies (Sec. 13 subsec. 3 No 3 Waste Disposal and Recycling Management Act).

Since the price for wood has been rising over the last decade, profit-oriented companies have found it economically attractive to collect waste paper even from households, thereby reducing the margins of municipal waste disposal entities. Jurisprudence on the interpretation of the semantically vague language of the act (“predominant public interests”) varied heavily, until the German Federal Administrative Court recently ruled that it is the municipalities' near-exclusive responsibility to take care of household waste, including waste paper.

Taking case law into account as well as the latest amendment of the European Waste Directive (2008 / 98 / EC), the article addresses the implications of the controversy with respect to goods whose essential regulatory features depend on external factors such as unsteady markets.