Following years of conflict, and a long arbitration process, a
commercial arbitrator has ruled that Orgaworld Canada must
accept leaf and yard waste in the City of Ottawa's green
bin program and dismissed Orgaworld's claim against the City.
The decision is a win for Ottawa taxpayers, but a critical
internal audit of the City's contracting process
shows that whole Orgaworld deal was still unnecessarily
Orgaworld has applied for judicial review of the Green Bin
In 2008, the City of Ottawa signed a 20-year contract with
Orgaworld Canada to process organic material from its green bin
program. Although the contract required Orgaworld to process leaf
and yard waste, Orgaworld refused to accept this material,
arguing that it was excluded from the initial request for
proposals. Orgaworld's refusal forced the City to pay to have
it processed elsewhere.
Following 71 days of hearings between June 2012 and December
2013, as well as written submissions, a commercial arbitrator dismissed Orgaworld's $1.3 million claim
against the city and ruled that leaf and yard waste could be
included in the City's green bins. The arbitrator also ordered
Orgaworld to pay for the additional costs incurred by the City to
process the leaf and yard waste that Orgaworld refused to
One has to wonder how a $1.3 million dispute could possibly
justify 71 days of hearings- the legal, arbitration and transcript
costs could easily exceed the amount in dispute, especially if
one adds in a judicial review.
The City's internal audit review of the Orgaworld contract
found significant and embarrassing errors. In particular, under the
contract the City is required to pay Orgaworld $8 million a year to
process a minimum of 80,000 tonnes of organics. However, the
auditor's analysis found that the range of available organic
matter, excluding leaf and yard waste, was only 21,000 –
57,000 tonnes per year. If separated out, leaf and yard waste could
be processed elsewhere at a much lower rate than the cost per tonne
charged by Orgaworld. As Auditor General Ken Hughes explained when
tabling the report to Council:
"Ottawa has been paying a premium to send some of its leaf
and yard waste to Orgaworld on
one hand while not being able to meet guaranteed volumes at the
plant on the other. Together
these penalties to date total $7.7 million..."
In defining source-separated organics to include peak
season leaf and yard waste to the extent that it allows the city to
bring such waste to Orgaworld, subject to limitations, during peak
periods in the spring and fall.
Allowing the City's damages associated with the
diversion of fall peak leaf and yard waste from Orgaworld that
occurred while the matter was before the arbitrator.
Refusing to grant Orgaworld compensation for its losses
associated with being forced to accept spring peak leaf and
yard waste while the matter was before the arbitrator.
Both this arbitration and the ongoing
arbitration regarding funding for municipal blue box programs
demonstrate the huge costs and complexity of municipal recycling
programs, and the enormous legal and cultural challenges of
public-private partnerships in the waste diversion area. We should
not take those coloured bins for granted.
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