The NSW Environment Protection Authority is failing to crack down on illegal rubbish dumping, a parliamentary inquiry into waste management has found.
The report, released on Wednesday, also found criminal elements had infiltrated the industry and it recommended the government not approve a controversial waste incinerator plant proposed for Sydney's west.
Several stakeholders, including the state's health department, raised "significant" concerns about air pollution over Next Generation's proposed facility in Eastern Creek.
Labor MP and committee member Penny Sharpe said the government must now scrap plans for the incinerator which would burn up to 1.3 million tonnes of waste per year.
"The premier must stand up today and guarantee this incinerator will not go ahead," Ms Sharpe said in a statement.
Christian Democrat Paul Green, chair of the inquiry committee, said he was "alarmed by the many pressing challenges facing this state" including a lack of waste management infrastructure.
Blacktown City Council urged the state government to take notice of the inquiry's decision.
"In light of the recommendations and the overwhelming lack of support for the project in Western Sydney, Blacktown City Council calls on Premier Gladys Berejiklian to stop the Dial A Dump proposal to burn waste at Eastern Creek," Mayor Stephen Bali said in a statement on Wednesday.
"Instead, invest more in encouraging recycling and the creation of a zero waste economy."
The committee made 36 recommendations, including that the NSW EPA develop and implement a state-wide approach to ending the interstate transportation of waste.
It also recommended the state government introduce a "fit and proper person" test for proprietors and company directors to assess whether people may work in the waste industry.
The NSW EPA was also called upon to regularly publish up-to-date waste data.
Environment Minister Gabrielle Upton said in a statement: "The government will consider all the recommendations from the parliamentary inquiry."
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