Case Study on Audit of Management of Municipal Solid Waste Reduction and Classification in Shenzhen

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I. Project background

(I)  Municipal Solid Waste (MSW) disposal in China. China is the most populous country as well as a country with large waste output. In the process of urbanization, the waste as metabolites of cities is gradually taken seriously by the government. In recent years, with the rapid development of China's MSW processing, the front-end works from the new construction of harmless disposal facilities and transportation construction to waste sorting are developing continuously. In May 2012, the Chinese government issued the Twelfth Five-year” Plan for Construction of Municipal Solid Waste Harmless Disposal Facilities, with the target that by 2015, our country will establish a sound MSW treatment regulatory system.

(II) MSW disposal in Shenzhen. Shenzhen City in Guangdong Province is one of the regional centers in Southern China, and also a national economic center. Statistics show that with the citys rapid economic and social development and a high concentration of urbanized population, the average annual increase of waste output is about 8%, and it is expected that the quantity of waste in Shenzhen that needs to be disposed of will increase to 17,800 tons per day. At present, Shenzhen has faced the shortage of waste disposal facilities, overload operation of landfills and a downward trend of harmless treatment, so it is unsustainable to continue dealing with garbage by the traditional way of “landfill and incineration”, and it is imperative to implement waste reduction and classification treatment that promotes resource recovery, reduces waste quantity and improves the level of waste management.

(III) Measures taken by Shenzhen Municipal Government. In July 2012, Shenzhen Municipal Government issued the Plan for Implementing the Twelfth Five-year” Plan for Municipal Solid Waste Reduction and Classification, with the overall goal of achieving “zero growth” of garbage output per capita and “zero landfill” of original mixed waste, and effectively solve the bad smell in landfill by the end of 2015; striving to make the rate of harmless treatment of waste 100% and the rate of safety treatment of hazardous waste 100%. To achieve this goal, the municipal government has taken a number of active and effective measures, including:

1. Institution settings. In 2012, Shenzhen launched the building of 500 waste reduction and classification demonstration units (communities). A joint conference institution for MSW reduction and classification was set up led by the Municipal Urban Management Bureau and all district (new zone) governments (management committees). Shenzhen MSW Classification Management Center under the environmental health management office of the Municipal Urban Management Bureau is equipped with professional personnel to effectively carry out the establishment of garbage reduction and classification demonstration units (communities).

2. System construction. Guidelines for operation of garbage reduction and classification in residential area, government institutions, primary and secondary schools were compiled; The Interim Measures for Shenzhen Urban Residential Communities Garbage Reduction and Classification Subsidies and Reduction Subsidies Management was formulated, and the legislative work of Measures for Administration of Shenzhen Garbage Reduction and Classification was launched.

3. Funding assurance. In 2012, the public finance departments at municipal and district levels arranged special funds of 150 million yuan for waste reduction classification with the actual expense of 18.83 million yuan, including the budget of 24.14 million yuan approved at the municipal level, with the actual expenditure of 5.016 million yuan.

4. Publicity and education. The government will make full use of the public media, continue to carry out publicity of MSW reduction and classification technology, hold public advocacy activities and spread knowledge on MSW reduction and classification in streets and communities, and open “zero waste” lectures in the city, hold seminars in schools and factories to promote public education and raise the awareness of the citizens.

5. Promotion of classification demonstration. The demonstration units (communities) in Shenzhen adopt four ways in the treatment of classified and collected kitchen waste. The first is site treatment by small processors. The second is the relatively concentrated resourceful treatment. The third is the integration of food waste and kitchen waste. The fourth is a kitchen waste treatment plant newly built with daily processing capacity of 30 tons. According to the characteristics of residential areas, government bodies and schools, Shenzhen explored trial implementation of different classification methods such as the relatively concentrated treatment at fixed time and places”, “low carbon office, green dining”, “small hands with big hands” and so on. All districts preliminarily constructed the waste classification and collection systems matching with the demonstration site classification methods: the first is to transform the garbage collection containers and facilities in demonstration units (communities). The second is to set up the service station with functions such as waste reduction and classification consultation and appointed recycling service for recyclable material. The third is to put the kitchen waste of all demonstration units (communities) into special collection container, implement classified collection and transportation. The fourth is to set up harmful waste collection containers in the demonstration units (communities), with new classification and collection points of waste batteries. A batch of kitchen waste treatment facilities shall be constructed.

II. Audit objective, scope, coverage and criteria

(I)  Audit objective

Through the investigation on the MSW collection, transportation and terminal handling situation, we shall objectively evaluate its economy, efficiency and effectiveness, and find the existing problems, analyze the reason, put forward more targeted suggestions and opinions, promote the realization of MSW treatment, reduction and reutilization.

(II) Audit scope and coverage

From July 29, 2013 to September 30, 2013, Shenzhen Municipal Audit Office dispatched an audit team to carry out audit investigation on the MSW reduction and classification management in 2012, focusing on the organization, management and promotion of MSW reduction and classification, and the use of special funds. During the investigating period, the audit team has found out the scale of funds for MSW reduction and classification in 2012, with extending investigation on the progress of MSW reduction and classification in seven districts such as Futian, Luohu, Baoan and Longgang. The audit objects include the people's governments at the municipal and district levels, the relevant departments in charge of finance, environmental protection and urban management, as well as some project construction units and enterprises.

(III) Audit criteria

Main audit criteria are from the following laws and regulations: Law of the People's Republic of China on Prevention of Environmental Pollution Caused by Solid Waste, Measures for Administration of Municipal Solid Waste, Regulations on Administration of City Appearance and Environmental Sanitation Management, Shenzhen “Eleventh Five Year” Scheme for the Implementation of Municipal Solid Waste Reduction and Classification, etc.

III. Major audit findings

(I) The construction of demonstration units was so slow that the launching task could not be completed on time.

In February 2012, Shenzhen launched the construction of 500 demonstration units (communities) for waste reduction and classification, and required to start 50 demonstration sites at the municipal level, and 450 demonstration sites in districts (new zones). But by the end of 2012, 304 units (communities) were actually launched in the city, taking up 60.8%.

(II) The insufficient waste disposal ability, low classification accuracy rate, recyclable material and harmful waste that have not been collected for disposal restricted the further promotion of waste reduction and classification.

1. The construction progress of kitchen garbage treatment facilities are different, with insufficient processing power. At present, the demonstration sites are being established, with different construction progress of waste disposal facilities in different districts. Except Futian, Nanshan and Yantian districts, other demonstration units (communities) in the city produce kitchen waste of 110.4 tons every day, with corresponding daily disposal capacity of 49.1 tons, accounting for 44.5% of the required capacity. The insufficient processing power caused front-end classification and back-end combination in landfill and incineration in some districts.

2. Affected by the process, technology and classification accuracy rate, the kitchen waste can not be fully processed with the established waste disposal facilities. Firstly, the existing technology is unable to dispose green waste and pericarp with high fiber content in kitchen waste. Secondly, the accuracy of kitchen waste classification in residential areas is not high, which must be disposed after manual sorting again. According to statistics, among the total 251 demonstration communities carrying out the garbage classification, there are only 50 communities outputting waste free form secondary sorting, accounting for 19.9% of the total number of pilot communities.

3. The recycling material classified can not be recycled completely, and hazardous waste can not be collected for disposal. A large number of recyclables with low value, such as clothes, furniture, glass, plastic bags, can not be effectively recycled, and finally can only be buried or burned. In addition, due to the lack of effective coordination mechanism, the responsible subject for the disposal of harmful waste classified from MSW is not clear, and harmful waste can not be effectively collected for disposal.

(III) Problems in fund management and use.

Audit findings: 1) The management of the reimbursement using the special funds for MSW reduction and classification is not up to standard. 2) Some terms of the economic contract are imprecise with the potential risk of economic loss. 3) The accounting of special funds for classification demonstration site is not integrated, the use of funds lacks index constraints, and there are no clear regulations about how to calculate the subsidies to the units using funds, how to deal with the surplus funds, and about the definition of regulatory agencies and their responsibilities, etc. It is urgent to reform the system of funds management.

(IV) The current reduction subsidy regulation needs to be improved .

To encourage the property company to guide the residents to participate in waste classification, Shenzhen municipal government gives the property company in residential area that classified kitchen waste a subsidy of 66 yuan per barrel (240L standard barrel). It is found in the investigation that this standard is difficult to be supervised in the implementation process. The first reason is that the incentive fees for the residents of the community are included in reduction subsidies paid to the property management company; the second reason is that the flaws existing in the measurement link of kitchen waste and lack of a third partys supervision make it hard to avoid frauds

IV. Audit recommendations

(I)  We suggest related departments of the municipal government improve the coordination mechanism, clearly define the responsibilities of relevant units for recyclable materials and harmful waste disposal, solve as soon as possible the problems that the renewable resources in waste reduction and classification disposal can not be recycled and intensively reused, and the problems of sub-standard disposal of harmful waste.

(II) We suggest the urban management departments at municial and district levels taking the opportunity of establishing demonstration units, strengthen fundamental work, study and improve the form and standard of government subsidies, actively explore and try out all ways for waste reduction in the current situation of insufficient kitchen waste processing capacity, screen out the economic and efficient waste reduction and classification methods in accordance with the characteristics of all districts.

(III) We suggest the municipal urban management departments strengthen the budget management, financial management and contract management, establish and improve the internal control system; strengthen supervision on the units using public funds, and improve the normalization and performance of public funds.