A 150 million-euro worth controversy between the Bulgarian state and local businesses over package recycling fees will be decided in court.
Four organisations in this country involved in package recycling - namely Ecobulpack, Ecopack, Reco Pack and Repack, as well as about 1500 companies, have filed complaints in court against an order by Environment and Water Affairs Minister Djevdet Chakurov. The order obliges businesses to pay the state the so-called product fee for packaging, regardless of the fact that they are paying the four organisations for the same thing.
Ecobulpack, Ecopack, Reco Pack and Repack, which are all recognised by the Bulgarian state, are responsible for collecting and recycling packaging materials after their use.
The announcement of the court action was made on March 27 by Dimitar Zorov, a manager at Ecobulpack, before a meeting with Deputy Environment Minister Chavdar Georgiev that was expected to settle the dispute.
No settlement, however, has been reached. After the meeting, Georgiev said that Chakurovs order was unlikely to be revoked unless there was a court decision to that effect.
On March 10, Chakurov introduced the double-fee payment for businesses with the motive that he would not accept the audit reports on the four organisations operation. The latter are government independent and, therefore, no control could be exercised over them by the state.
A check by the Environment and Water Affairs Ministry has shown that the recycling organisations have not met their commitments on attending to used packaging. Another complaint by the authorities is the lack of enough investment in the collection and recycling of packaging, or exporting them abroad for recycling.
The ministry has also found purely formal flaws in the preparation and legalisation of the audit reports on the 2005 operation of Ecobulpack, Ecopack, Reco Pack and Repack. All the businesses that are members of the organisations will have to pay the recycling fee, having a total worth of 150 million leva, for a second time. According to Zorov, only Ecobulpacks members will have to pay an additional 50 million leva.
The trouble is that if they are forced to pay the double fee, the companies will have to raise their production prices. Their membership in the recycling organisations was designed to prevent the price hikes by avoiding the product fees, which are 10 times higher than the membership fee in one of the four licensed by the Environment and Water Affairs Ministry.
This is why Bulgarias supreme court will have to decide on the future of the product fees that, according to Chakurovs order, should have been paid within 14 days but have not yet been paid to the treasury.
During the Economists Sixth Business Roundtable with the Bulgarian Government on March 22, a representative of Procter & Gamble for South East Europe publicly expressed the companys discontent with Chakurovs decision. The representative warned that such actions could worsen the business climate in the country and drive back some of the large foreign investors, who are among the biggest manufacturers and importers of packed goods.
