The environmental movement has been very, very good for the waste kings.

A rash of tougher regulations is expected to put as many as a third of the nation's landfills out of business. But for Waste Management Inc. and Browning-Ferris Industries Inc., the undisputed leaders when it comes to collecting and disposing of garbage, that's actually good news.

With their huge size and deep pockets, the two companies are better-equipped than most of their competitors to comply with increasingly strict environmental regulations. They can hire the lawyers and lobbyists and spend the years and dollars it takes in the current political climate to win permits for waste treatment facilities.

"With the federal regulations getting more and more strict about protecting groundwater supplies and how to handle solid waste, the fragmented industry is consolidating very rapidly," said Richard F. Rossi, an industry analyst with Dean Witter Reynolds. "Money talks."

And it will talk louder as regulation gets stricter. The tightened federal regulations for landfill design and operations have put considerable pressure on smaller companies, forcing them to cede much of the business to larger competitors such as Waste Management and Browning-Ferris, which together control approximately 20 percent of the market.

The shift in the solid waste industry has occurred rapidly. Twenty years ago, the business was dominated by small companies that bulldozed trash and often tried to bulldoze their way through political and community objections to their operations. Disposal of garbage was typically unsophisticated. Usually, it was dumped in old quarries, in wetlands or on ground that, as a result, could not be cultivated or developed for years. Oftentimes, it caught on fire or was purposely burned to reduce its volume.

When William D. Ruckelshaus, now chairman of Houston-based Browning-Ferris, was administrator of the Environmental Protection Agency, one of the agency's big initiatives was to close 5,000 open burning dumps, said Philip S. Angell, who worked with Ruckelshaus at the EPA and has joined him at Browning-Ferris.

Now landfills require sophisticated design, air and water monitoring, synthetic liners and commitments from the operators to leave behind usable community facilities when the landfill is closed. "It's become a science rather than just pushing stuff around," said Bruce Weddle, director of EPA's municipal solid waste program. As a result, the industry has become much more professional, he said.

Today, the cost of developing a landfill runs about $2 million to $4 million. A decade ago, it took only about one-fifth that amount, according to Waste Management, which has headquarters in Oak Brook, Ill.

Winning approval to operate a landfill or an incinerator or a recycling facility is difficult, and "each time {an environmental} violation comes up, it is added up by those opposed to landfills," said Ruckelshaus. The landfill opponents use their lists of violations as ammunition against the facilities that the company wants to build, he said.

In the past, neither Browing-Ferris nor Waste Management had a reputation for being particularly sensitive to environmental concerns. "They didn't score many points as being necessarily a cooperative entity with environmental agencies. They tended to be somewhat pushy," said Dean Witter's Rossi. "They weren't as sensitive as they should have been to how to handle the public questions about their business."

But the corporate cultures at both companies are changing. Both have recently adopted incentive plans that tie bonus pay to environmental compliance. For instance, a landfill manager with either a long list of minor violations or a single major violation might lose the year's bonus.

In addition, the companies have actively recruited experts to help them address environmental concerns, and Waste Management operates a "landfill university" where technical employees spend a week in eight-hour sessions designed to keep them up-to-date on regulations and technology.

"What we may have considered a compliance mentality 10 years ago would pale by today's comparison," said Harold Gershowitz, Waste Management senior vice president. In the past four years, the company has brought in new managers in almost every position, he said. "Now we think we have a work force that has an acute sensitivity to environmental issues," he said. "They're certainly not viewed as a chore. They're not viewed as things you put up with. These are people who have a strong environmental ethic."

Both companies have achieved much of their growth by acquiring smaller companies. Browning-Ferris spent more than $400 million to buy out no fewer than 131 companies last year, while Waste Management added 97 companies for about $300 million. Even so, approximately 40 percent of the market for solid waste disposal is still in the hands of small operators and about 30 percent is in the hands of municipalities, said Ruckelshaus. "That's a long way from being totally consolidated."

As they have grown, however, the companies have also been followed by allegations of antitrust violations, some of which resulted in settlements and convictions. In a case against Browning-Ferris, which went all the way to the Supreme Court, a rival company, Kelco Disposal, was awarded $51,000 in compensatory damages and $6 million in punitive damages for injuries from predatory pricing.

Both companies say their antitrust problems were isolated incidents at local divisions, problems they say they hope are now behind them. "While we've had a handful of these cases over our nearly 20 years, we have always addressed them responsibly," said William J. Plunkett, Waste Management vice president for corporate communications. "We have instituted an aggressive training program to make sure our employees know that we will not tolerate this kind of activity."

"This company has got a very vigorous antitrust compliance training program right now," said Browning-Ferris's Angell. "This industry is under so much scrutiny, such press and such political scrutiny, we just can't do that."

Environmental concerns have not only better positioned the two companies against their competitors, but they have also fostered new lines of business. Treating and disposing of medical waste is an area that barely existed five years ago. "We started a separate business 30 months ago, and it's maybe a $1.5 billion market," said Ruckelshaus.

Both companies are also heavily into recycling, which is a rapidly growing market. Waste Management will recycle over a million tons of household and commercial waste this year, up from 750,000 tons last year. The company is partners with Du Pont Co. in a joint venture to build five plastic recycling plants and has a separate venture involving newsprint.

For its part, Browning-Ferris recently announced an agreement under which it will sell Alcoa used aluminum cans it collects. The company is also getting involved in various volunteer efforts, such as the one in Washington to collect recyclable trash from the Mall in the wake of the Fourth of July fireworks display.

The two have also set their sights on Europe as a key area for expansion. In Western Europe, both the nature of the industry there and the demographics of the marketplace are driving the investment, said Waste Management's Gershowitz. The industry is fragmented and just beginning to adjust to new environmental demands. "If you look at Europe today, it's similar to what the U.S. looked like in 1971 when we went public. There is an opportunity to accomplish what we accomplished here all over again."

If you consider Rotterdam as the center of Western Europe, within 500 miles of that urban core is a population equal to three-quarters of the U.S. population. Not only is the potential market large, it is also crowded into a smaller area, making it easier to deliver services, said Gershowitz.

In the meantime, both companies continue to cope with the one unchanging reality of their business: Nobody wants them in their neighborhood. "At one time, we thought recycling facilities would be embraced, but they're not either," said Gershowitz. "It's the old adage: Everybody wants you to pick it up, but nobody wants you to put it down."

What might pose a threat to the growth that has characterized the business in recent years? Ironically, the answer is a retreat from environmentalism, said Gershowitz. "Our greatest concern with respect to a recession or depression in the country," he said, "is that the sensitivity with respect to environmental regulation might suffer."