Accounting and Auditing

Auditor finds massive increase in illegal dumping of construction waste in Hong Kong

The report from the Audit Commission came a week after the Office of the Ombudsman announced it would launch a probe into the environmental protection, planning and conservation departments handling of illegal landfilling

PUBLISHED : Thursday, 24 November, 2016, 7:03am
UPDATED : Thursday, 24 November, 2016, 7:02am

The Environmental Protection Department lost HK$4 billion in foregone revenue over the last decade due to “significant under-recovery” of costs in providing disposal and sorting facilities for construction waste, according to the government auditor.

The department was slammed for lax enforcement over the illegal dumping of construction and demolition (C&D) waste, with the number of reported cases across the city tripling from 1,500 in 2005 to 6,500 last year.

The report from the Audit Commission came a week after the Office of the Ombudsman announced it would launch a probe into the environmental protection, planning and conservation departments handling of illegal landfilling and fly-tipping cases on private land.

“In 2014-15, only 33 per cent, 44 per cent and 63 per cent of the costs of providing disposal services at sorting facilities, public fill banks and landfills were respectively recovered from the charges,” the auditor stressed. “From 2006-07 to 2014-15, the estimated unrecovered cost totalled HK$3.81 billion.”

The auditor stressed that charge rates under the existing scheme had not been revised or reviewed since 2006, despite nearly 10 years of repeated requests by the Financial Services and Treasury Bureau. It has only recently agreed to do so based on a “user-pay principle”.

“The lack of revisions to the charge rates in the past years to recover the costs incurred had reduced the effectiveness of the charging scheme on providing economic incentives for producers of abandoned C&D materials to reduce generation ... practise waste sorting,” it said.

The Civil Engineering and Development Department (CEDD) currently charges HK$27 per tonne at public fill banks, HK$100 at sorting facilities and HK$125 at landfills.

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The auditor urged the EPD to work with the CEDD to take measures to ensure fees and charges were “revised in a timely manner,” having regard to full-cost recovery principles, environmental implications and the impact on trade.

The EPD was also held to account for inadequacies in enforcing cases of illegal dumping.

It cited a trial scheme involving the installation of camera systems last year, in which 170 cases of illegal dumping of C&D materials was caught on tape. As of July 2016, the EPD had only taken prosecution action on 46 cases, the auditor said.

The slow progress was blamed on letters to vehicle owners being returned unclaimed, drivers or vehicle owners not providing details of cases and drivers claiming the dumping was carried out “under instruction”.

Both the directors of environmental protection and civil engineering and development said they agreed with the auditor’s report, pledging to strengthen actions to detect and prevent illegal dumping of waste and acknowledging that charging scheme needed to be adjusted.