BCRS seeks to set record straight, says it will do better as it faces public backlash

The top brass of the highly controversial and much-maligned Bottle Collection and Recovery Scheme has made a number of pledges, clarifications and even admissions with The Shift following its recent expose’ on the system and the concerns and criticisms of the new privately-operated recycling system.

Speaking with The Shift earlier this week, BCRS chairman Pierre Fava and CEO Edward Chetcuti acknowledged the public backlash against the new system and insist they are addressing all of it.

“Do we need to tweak the system more? Yes,’ Fava says, “It is still early days, there is more to be done and we are doing it.

“All the critiques out there, we’re addressing them all. We are changing the culture here so we did not set out on this mission back in 2018 thinking it was going to be easy, and it hasn’t been.”

The criticisms range from the €0.10c voucher refund effectively being a stealth tax, that the system is exporting waste to destinations unknown and that it has placed a disproportionate burden on the old and infirm.

The company insists all the funds it collects from non-returned receptacles will be ring-fenced and fully reinvested into the operation, which will be fully reflected in the company’s annual accounts.

Moreover, the company has pledged to do better where it has been seen to fall short of the mark, especially when it comes to catering for the elderly and the infirm.

For starters, Fava explains how at the inception of talks between BCRS and the government, the government’s two main proposals had been unacceptable: the original concepts to impose a €0.20c deposit fee as opposed to today’s €0.10c and on having barcodes specific to Malta being affixed to all imports falling under the scheme.

As unpalatable as the €0.1010c fee appears today, the €0.20c the government had been intent on, believing it would have added incentivisation value, would have been wholly unsuitable for Malta, BCRS believes.

“That was before the Covid-19 pandemic and when the economy was doing well,” Fava says. “But we still felt we could not accept that. The fact that three million bottles were returned in three weeks shows the government at the time was wrong.”

The barcode requisite, meanwhile, would have proved prohibitively expensive for manufacturers given Malta’s economies of scale, which, in turn, would have led to a number of products disappearing from the shelves.

Deposit fee ‘is not a tax’

The €0.10c return fee, Fava insists, is no tax since, he says, “A tax is something you are paying into the government’s coffers and we do not know where it goes, while this €0.10c is completely transparent – it enters at one end of the system, passes through it and goes out the other end when the voucher is redeemed.

“This is a transparent system, and I have absolutely nothing to hide. It will all be fully visible and accounted for in the end-of-year audit and accounts.”

For the sake of clarity, Chetcuti explains, in detail, the lifespan of a €0.10c deposit.

“When a producer or an importer places a product on the market for the first time, they also place the €0.10c into a fund. The fund is a separate bank account that is overseen by us. We have a secure online system where they report what they put on the market. They receive an invoice and pay the €0.10c into the fund.

“When they sell the product, they charge the €0.10c down the supply chain, so they get their money back. The retailer sells the product to the consumer, so they also get their €0.10c back. The consumer then returns the container and gets the €0.10c voucher that is extracted from the fund where the producer had originally placed the €0.10c.”

But the million-euro question many people are asking is, what happens to all the money charged on receptacles that are not returned in exchange for vouchers?

“The €0.10c remains in the fund,” Chetcuti says. “But at the end of the day, the structures of the law, of the licence and also that of BCRS are such that no funds can ever leave the company. Any money left over is to be used for the scheme’s function and reinvestment into the scheme.”

The company operates on a strict non-profit business model, with no dividends being paid to the shareholders.

Fava adds, “Let’s say we reach the 2030 90% recycling target and 10% remains in the system. First of all, the associated funds remain there for a year because that is how long the voucher is valid.

“Circular Economy Malta has clear visibility and monitors the fund, to which we report regularly, and they are keeping tabs. Nowhere do we disincentivise recycling; it just doesn’t pay us. For example, if our targets are not reached, meaning there are more €0.10c available to the company, there are steep applicable fines, so it just doesn’t pay.”

But the money to run the operation has to come from somewhere, they insist. In addition to the running expenses, the baling machines alone will need a €5 million refresh within a couple of years, and the €18 million injected into the company by the shareholders also needs to be repaid.

“This is a massive operation with 50 employees, logistics, export costs and a lot more. The revenue streams are from the sale of recyclable material and the deposits that remain in the system.

“But that is still not enough to cover costs so there is an administration fee for producers and importers so we can break even. That is because the extra unclaimed €0.10c and the sale of recyclable material do not even cover the costs of the operation.”

‘We are learning’

Apart from the scheme’s monetary aspect, criticisms abound about its inconvenience for consumers and retailers alike but, Fava insists, this is a question of changing the mindset.

“Has it been easy? No. Has it been perfect? No. Are we learning? Yes. We have had hiccups and issues, and we are tackling them.

“But what I do is I sit down and I listen. I’ve met a lot of people to fine-tune the system, and I am continuing to do just that.”

Among the first criticisms was that, at the outset, the reverse vending machines were continually full and unable to accept more deposits, a problem Fava says is being tackled.

He points to a considerable incidence of hoarding having been noted at the system’s inception, which “were in ridiculous numbers. People were coming with vans with thousands of bottles, and they were blocking up the machines.

“I feel I need to set the record straight here.”

On day one of the operation, he said, there were 100,000 receptacles deposited within a matter of hours. That is because some people had been wise to the fact that many products had a change in barcode because of the scheme, and they had to be out on the market months beforehand to be tried and tested. Some people realised that, and they hoarded those products.

“We took corrective action for that,” Fava explains. “We knew there would be a couple hundred thousand euro out there that we were going to have to pay for.”

Responding to the flack received from smaller companies that have a few products on the market and fear their data will be shared with the big players forming part of BCRS, Fava insists the company has set up a system of Chinese walls to prevent any data, or funds, from leaking out of the company.

“I categorically state that the board has no visibility of that data, and if any aggregate data does need to go to the Board, it has to be sanctioned by either myself or the CEO. If a director calls and asks for data, it will not be given to him or her. We have also spent a lot of money to protect the system against fraud and hackers.”

All recycling is EC-certified and done in the EU

Another leading criticism is that no one knows where Malta’s plastics are being sent for recycling or whether it is simply being dumped at sea or in a landfill on another continent.

Along such lines, Fava explains how every bale of recyclable material is sent to an EC-certified recycling operation in the EU.

The contractor chosen by BCRS for the job, he adds, had to provide a hefty bank guarantee that the material would be recycled in the EU and that BCRS will be delivered certificates from EU-accredited recycling plants to that effect.

Fava also explains how the recycling of such material in Malta simply does not make sense given our particular economies of scale. For such a plant to be viable, it would need to be fed with around 25,000 tonnes of material a year, while Malta as a whole could collect only around 9,000 tonnes.

“We are far away from those kinds of numbers; we would have to almost triple our waste. Who would invest in that?

The company is also tackling the litter around the RVM sites that accumulates when people’s bottles are not accepted by the machines and they are merely discarded on the nearby ground.

Fava explains how every hub is planned to be emptied and cleaned 15 to 20 times a day, with runners also cleaning up the areas when they are emptying the machines – at what Fava estimates as an extra expense of €60,000 to €70,000 a year.

Why the machines are finicky

Another major complaint is that the machines are not accepting receptacles that are not fully intact and with their barcodes being clearly legible, short of which they are being accepted.

That, according to BCRS, is a necessary evil.

As Chetcuti explains, “One of the reasons we need to make sure that we accept only beverage containers, and no other types, is because you only can give a €0.10c refund for something that was put there into the system in the first place.

“That is why the machines need to be able to read the barcode and check the shape – because you can even print a barcode and place it on a ketchup container these days.”

BCRS has seen similar attempts in Malta since the scheme began, and it is common in other countries operating such systems to find toilet rolls with barcode labels stuck to them.

Another criticism is that the machines give out vouchers that must be redeemed against purchases instead of money.

Fava says BCRS has looked at the best practices across Europe, and they all give out similar vouchers. The reason is that if the machines were to be stocked with coins, they would undoubtedly be attacked and if the security and infrastructure around the RVMs were to be on ATM levels, costs would increase tenfold.

Also, when it comes to supermarkets hosting the machines on their property, taking up valuable space, BCRS observes how it is only natural that the supermarket would want those vouchers to be redeemed at their outlets and not a reimbursement with coins.

Smaller grocers, meanwhile, have complained that they lack the physical space to store empties, but Fava counters that an app has been developed where they can book collections and increase frequencies in line with their requirements, within reason.

The elderly and infirm

The hardship on the elderly and the infirm has been a major sore point in the system, with machines either being located too far away from their homes or burdened individuals with having to deal with empty bottles and machines.

“I don’t have a solution at the moment” Fava says, “but we are looking into it. But what I need to say is that this is a national project and people need to take ownership of it. We at BCRS want to learn, and we want to engage. Don’t just criticise; give us ideas.

“First of all, we are looking into old people’s homes, and that could help a lot. Secondly, I, for one, approached my church and asked if we could send people around to collect empties from the elderly in the area and maybe have the money donated to the Church. I think many elderly people wouldn’t mind donating to the Church, which can give to the homeless or needy.

“Third, we need to see how these bottles are being delivered to such people. The 300-gram weight of six empty water bottles may not be such a chore, but it might be difficult for people to get to a machine.

“What I want to understand better is how the bottles are getting to these people in the first place, and then we can see about those same people taking back the empties.  For retailers, it could present an opportunity to retain or even attract new customers.”

Whatever the case, Fava says the company needs to seriously address this area of BCRS’ operations.

But, as matters stand, Fava points out that at present, Malta has one reverse vending machine per square kilometre and more machines per capita than other countries.

“Nothing is perfect. We have done the work, and people need to give the system time to develop.”