Updated | Green MT accuses rival GreenPak of benefitting from violation of state aid rules

Waste collection providers Green MT are accusing the authorities of violating State aid rules in an ongoing tiff with competitors GreenPak.

Green MT said the authorities were allowing councils served by their competitor, to pay waste collectors themselves. This was saving GreenPak thousands of euros because the company was being indirectly subsidised by local councils, Green MT charged.

In a statement, Green MT, a company owned by the Malta Chamber for Small Enterprises - GRTU, said that from July 2013 to November 2017, a number of local councils, in agreement with GreenPak Coop had paid up to €500,000 for the collection of recyclable waste and glass collections from their localities.

“These payments were made directly to the waste collectors by local councils instead of by GreenPak thus saving it hundreds of thousands of euros that were instead paid out of public funds,” Green MT said.

According to Green MT, between December 2015 and July 2016, the Mosta Local Council had paid Northern Cleaners Group, the contractor, the sum of €62,068.

Moreover, it said that the St Julian’s local council had paid €35,566.98, while the Qormi Local Council had paid €27,037.36 under similar circumstances.

Green MT said it had requested a payment solely for additional services (such as the supply of grey and green bags) and not for the collection of recyclable waste from local councils. Green MT said these services were "arbitrarily imposed" by the environment authority.

It added that these conditions had been imposed on it through the implementation of a legal notice back in 2017. Green MT insisted that the legal notice effectively bypassed Public Procurement Regulations.

“GreenPak Coop on the other hand actually created a precedent throughout the years between 2013 and 2017 by charging local councils for the collection of recyclable waste, whereas the law clearly states that it is the schemes that are to carry the burden of the cost of this service.”

GreenMT's recycling collection schemes are financed by the business community, according to the market placement of packaging waste on the market.

It said that GreenPak was having local councils pay waste collectors directly, saving it a considerable deal of money, “while Green MT continued to abide by the law and its permit obligations by paying from the collection of recyclable waste” using its own funds.

In addition to this, it said that WasteServ, the government agency tasked with organizing and overseeing waste management, was also paying GreenPak by the ton for material collected from local councils.                                                                          

“The facts are simple, Greenpak Coop should outline the truth and nothing but the truth. It has taken advantage of public funds for collection of recyclable waste and has also received funds from Wasteserv for services that it did not pay for. Any other circumvention of the truth is nothing but heresy,” it said.

Green MT added that it was willing to discuss ways of finidng a solution to the anomalies arising from “Legal Notice 226 of 2017”.

GreekPak to take legal action against Green MT

In a reaction, GreenPak said that the allegation that it had violated state aid rules amounted to defamatory statements, adding that it would be taking legal action against Green MT.

Reacting to claims that the St Julians, Qormi and Mosta local councils had paid thousands to third party contractors, the GreenPak said that contrary to what was alleged, “the state aid rules that Green MT is accusing GreenPak of breaching were actually performance-related contracts GreenPak had secured with St Julian’s, Qormi and Mosta, which had sought to sever relations with Green MT”.

Furthermore, it said that Green MT’s allegation related to sums paid by the local councils to GreenPak is untrue.

“The opposite actually took place since GreenPak paid the following sums: Mosta local council €112,000; the St Julian’s local council €27,000, and the Qormi council €90,000,” GreenPak said.

The company said that the councils were remunerated under the terms of a performance-related contract based on the number of green bags collected in each locality. It added that this “legal practice ceased in 2017 following the publication of a legal notice”.

GreenPak said the “unfounded allegations” follow revelations that Green MT had notified local councils that it would be charging them for carrying out the door-to-door collection of recyclable waste as well as a premium to service bring-in sites.

GreenPak said the decision was taken after the Environment and Resources Authority ordered Green MT to reverse its decision to discontinue the collection of recyclable waste from six councils in Gozo.

“The authority said Green MT was not entitled to take such action simply on the premise that this practice was not financially sustainable,” GreenPak said. “Green MT’s reaction was to disregard the law stating that its members should pay for the free service provided to the local councils and it informed several local councils in Gozo that it would be charging them as from today.”

GreenPak said it was hypocritical of Green MT to call for a level playing field when it has “repeatedly failed to submit accounts to the Malta Financial Services Authority”. It said that the only accounts ever submitted were for 2008, and were filed in 2013.

Finally, GreenPak said that it should be noted that it was actually Green MT that received State aid, to the tune of €690,000, thanks to an environmental fund that was established in breach of public procurement regulations and state aid rules to benefit Green MT and “effectively save it from impending bankruptcy”.

“This matter is currently the subject of court proceedings which will undoubtedly shed more light on the business practices employed by Green MT with the blessing of State authorities between 2010 and 2011.”