Landfill Hidden Cost

Abstract

Landfill sites have several long-term future costs which continue well beyond operational closure. Historically, small regional and remote councils are less likely to make adequate provision for these costs due to forecasting complexity and regulatory change. There is a need for these councils to adequately account for future costs (provisioning for landfill restoration) to ensure accurate financial reporting and good governance. The provisioning for landfill restoration involves three critical elements. There are the legislative and environmental requirements, there are the service obligations to the community and underpinning this, there are financial obligations. Many councils may have operating and closed landfill sites that give rise to an obligation to rehabilitate and provide after care site management. This may involve, for example, long-term environmental monitoring of sites into the future (30+ years). The liability can be significant, and the correct measurement and treatment of cost is vital to ensure financial reports are accurate. Good governance and accurate reporting for landfill sites may also be achieved through the preparation of a restoration accounting model. The preparation of a detailed closure and post closure care plan for the waste disposal site may provide some clarity around timing costs for landfill restoration and monitoring. Accounting for landfill is a technically complex accounting method which gives rise to several specific challenges for councils. These challenges may include identifying the historical landfill sites and understanding their key characteristics, determining the costs associated with aftercare management (including ongoing monitoring costs) and determining costs associated with rehabilitation. This can be a complex and time-consuming task for councils who do not have access to in-house resources and expertise. Interestingly, the landfill licence (part of the original DA) may require post closure care at a site to extend for a nominal period of 30 years. This period commences at the cessation of waste disposal activities and continues in effect until it can be demonstrated to the administering authority that the area used for waste disposal will not release contaminants into the environment. Councils operate as the tier of government closest to the community (where they work and live), and as such, they should be committed to ensuring they meet their legislative, environmental and community responsibilities pertaining to the management and remediation of landfill sites.