Waste Management Compliance Schemes

It's high time Government Decided

By Vince Farrugia Director General GRTU, Chairman Green MT

"We cannot allow Government on the basis of fiscal losses of any nature to interfere with environmental legislation" I said this when I committed GRTU into a preferred strategic partnership with government to get moving on an agreed waste management scheme for Malta. GRTU members also committed themselves to seek an agreed solution that, while liberating them from current taxation burdens would simultaneously lead to private business financing of waste collection, management and recycling in a national effort to meet our obligations as a country within the EU Waste Management guidelines.

I really believe that if we work together we may be on the verge of a Green Revolution. Families in many localities have grown to care more for their waste and the way they dispose of it.  It would be a real pithy were we to allow the notorious inaptitude of state bureaucrats to listen and design appropriate environmental legislation and promote half baked measures to break people's hopes by furthering a state of delays and frustrations.

A few years back, private businesses, SMEs and manufacturing firms were heavily criticized for not adhering to the "polluter pays principle". Government, without any prior consultation with the private sector, established the Eco-Contribution revenue regime with the sole aim of resolving the financial mess-up in which the state-owned company WasteServ landed itself when it was loaded with the whole waste management project. The Eco-Contribution regime is based on the product and not on its environmental accreditations. A very wrong basis on which to build an eco-tax regime.

When the Eco-Contribution system was enacted, Government had outlined that where private industry took up their Producer Responsibilities through the establishment of Waste Management Schemes, then those companies or traders who were members of an Authorized Scheme would be exempted from further payment of Eco-Contribution.

This statement was repeated over and over again. As GRTU we were the first to take related action. We took up the responsibility. We would have preferred that all constituted bodies were on the same boat in this respect, however we could not come to terms on a number of cardinal issues. We had however gone as far as establishing a company.

With this behind us, GRTU, who had led on this issue from many months back, set up its own fully owned subsidiary, GreenMt Limited with the aim of operating a not for profit Waste Packaging Compliance Scheme and also a Waste of Electrical and Electronic Equipment Management Scheme. After a lengthy process, which included the submission of very detailed and extensive working plans to MEPA as the Competent Authority, the company obtained the relative permits to operate both Schemes.

Our next step was now to make sure that Government holds on to its public commitment and issues the Eco-Contribution Exemption Mechanism so that these Schemes could kick-start on their own merits and fiscal sustainability.  However, despite agreeing on a mechanism way back in February 2008, a year ago, through Legal Notice 84 of the same year, Government still continues to drag its feet over the matter. The frustration this delay is causing is terrible for businesses who continue to pay a high price while others, in spite of the polluter pays principle and due to the incompetence of the Eco-Contribution system, effectively pay nothing. Frustration is also increasing among Local Councils who had contributed willingly to all consultations and negotiations hoping that the new regime will be in place in a short time. Frustration is also among all operators of systems related to waste management together with the general public who is enticed to do more while at the same time seeing government dragging its own feet on the matter.

This begs the question of why all the delay when we all want to move forward to give the country a better waste management framework. The answer, as you can imagine, is money. When the Exemptions are put into place the Treasury will stop receiving the income of something around € 14 million of Eco-Taxation (2008 estimate) on those products that would become exempt from Eco-Contribution. However, placing cards on the table, Government on its side rightfully says that it will not exempt anyone from Eco-Contribution unless it has proof that a Scheme is functioning in reality. Government is not going to accept paper work exercises that aim to defraud the tax authorities. GRTU has in fact presented proposals to ensure that while the honest trader receives his due no funny deals go on to besmirch the schemes.

We are at a stalemate. Whilst Private Industry through GRTU is ready to move on, Government does not want to let go of its fiscal income. We need to overcome this hurdle. We need to find the solution to move out of this impasse. Industry, trade and SMEs cannot take the burden of paying twice for the same service. Government wants those producers that have registered with MEPA, as Waste Packaging Producers and also Waste Electrical and Electronic Producers, to pay both Eco-Contribution and an approved Scheme. Enterprise owners will be refunded at a later date after all documents have been filed and assessed. To GRTU this is sheer nonsense. No businessman can be forced to pay twice and then await government to give him back his own money.

Surely this is not the way forward. I have taken a personal unending interest in this subject matter. The CEO GreenMt, Joe Attard, and the team of volunteers we brought together at GRTU as Board Directors and team leaders cannot take it any more. I Chair the Board of GreenMt and feel the frustration of our members. Erstwhile calm businessmen are starting to become really irate. We have over the last year and a half studied the market to such detail that we believe we are not only forerunners but also on the forefront of developments in this sector. We know this subject thoroughly. We know where the hurt is and we know what the solutions are.  We need Government to listen…move on…and to let us work.

We have waited enough now. It is time to move on. Schemes need to be allowed to work. Schemes need a breath of fresh air. Schemes need to obtain finance from their members whilst their members are exempted from Eco-Contribution.

Some sectors are bleeding through excessive payments of Eco Contribution. They need the Government to not only listen to their hurts, but take immediate action. Paying a Scheme would approximately reduce costs to traders and companies by 40% and more in some instances.

To add insult to injury, while accepting Eco-Contribution, we are being told by government representatives that as Waste Packaging Producers, business owners must continue to carry the legal liability for households waste packaging. No businessman will accept this nonsense and no one will accept to pay twice! It is a shameful proposal and said now under current adverse economic pressures, when enterprise is bending backwards to sustain their current level of employment, it really verges on the irresponsible.

GRTU has made decent proposals to government to help resolve this issue. The present eco-tax regime must be replaced. It does not exist any were else in the EU. What we are proposing is a best practice exercise that will not only do waste management and the environment good but it places Government on a sound footing in Malta and in the eyes of EU observers. With a little more trust we can do it.

Vince Farrugia is a Candidate to the European Parliament Elections on June 6^th 2009 for the PN/EPP-ED.