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Municipal waste companies

In 2021 in mainland Finland was about 264 Finnish municipalities out of 293 arrange municipal waste management in cooperation, providing services for 5.3 million, 95 % inhabitants. Only about 29 municipalities organize waste management alone, which rely mainly on the services of a municipal enterprise or business entity, either through contracts or tenders.

There are several options for co-operation:

1) Establishment of a municipal enterprise together with co-operation municipalities.

Private ownership is not allowed, so the enterprise should be municipally owned. A municipal enterprise can operate on market terms only at a small extent. The average volume of market-based operations of such an enterprise cannot exceed 10 % of turnover.

2) Establishment of an association of municipalities with other municipalities or agreement on the joint production of the service with another municipality or association of municipalities.

According to the Municipal Act (410/2015), waste management companies operating as an association of municipalities cannot have market-based activities, so they only accept waste on the basis of municipal responsibility stated in the Waste Act.

3) Municipalities can also agree on the joint purchasing of the service with another municipality or association of municipalities.

In case of purchasing services from a private service provider, the services should be tendered out in accordance with Finnish procurement law. However, organizational responsibility always belongs to the municipality. In this way could be avoided situations, where private operator goes bankrupt and is not able to provide need services.

In 2021, in Finland there were in operation 25 municipal enterprises, 4 associations of municipalities, 1 business entity and 2 balance units as well as one joint purchase service from private company, organized by four municipalities.

Municipal enterprises and associations of municipalities (Municipal Waste Management Organizations or MWMOs), are the most common way to organize waste management in Finland. Municipal enterprises and associations of municipalities are public entities. However, they are registered in the register of companies and establishments.

MWMOs operate on business principles but do not have the pursuit of profit as their goal. According to the Waste Act, the pursuit of a reasonable profit is acceptable, but this profit should be used to cover the activities of waste management and possible investments.

MWMOs perform many of the functions that belong to the responsibility of municipalities, such as e.g. information and consulting work related to waste management and recycling, waste transportation, biowaste treatment, are production of energy from waste and final disposal of waste.

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