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DRINKS GIANT FEARS NEW FUND WILL GUZZLE INDUSTRY MONEY

Coke fizzing over new Recycling Fund

As part of a new Waste Law passed by parliament May 15, a Recycling Fund headed by industry representatives, and to which producers of 11 kinds of waste (see chart below) would be obliged to contribute, would come into existence as of January 1, 2002.
One of the fiercest opponents of the proposed Fund, Coca-Cola Slovakia, has noted the new law does not specify how the Recycling Fund will spend its money, and has said it fears the new body will make inefficient use of levies and misallocate funds.
But the firm says it has identified an escape hatch. By using a special clause in the new Waste Law, producers can recycle products themselves or in concert with other firms, and in turn reduce their contributions to the Fund proportionately to the volume of waste they recycle. This, Coke says, means they can ensure industry levies for recycling are used efficiently


Some environmental experts say the fears of industry titans like Coke over the Recycling Fund are grounded.
photo: TASR

As part of a new Waste Law passed by parliament May 15, a Recycling Fund headed by industry representatives, and to which producers of 11 kinds of waste (see chart below) would be obliged to contribute, would come into existence as of January 1, 2002.

One of the fiercest opponents of the proposed Fund, Coca-Cola Slovakia, has noted the new law does not specify how the Recycling Fund will spend its money, and has said it fears the new body will make inefficient use of levies and misallocate funds.

But the firm says it has identified an escape hatch. By using a special clause in the new Waste Law, producers can recycle products themselves or in concert with other firms, and in turn reduce their contributions to the Fund proportionately to the volume of waste they recycle. This, Coke says, means they can ensure industry levies for recycling are used efficiently

"The Recycling Fund will be no more than an administrative tool for central and local government to raise money, and it won't solve the environmental problems connected with the production of waste," said Ivan Štefanec, general manager of Coca-Cola Slovakia.

"Our concern is that its creation would just take money away from industry, and that there are no guarantees how that money would be used. The fund would lack transparency. But the [above-mentioned] clause in the new Waste Law gives industry a choice, and allows companies to create their own body to deal with recycling," he added.

The new Fund will be run by a board of directors made up of 10 representatives of waste-producing companies, one nominee each from the Environment and Finance Ministries, and three appointees of local municipalities. It will also have a seven-member supervisory board made up of three appointees each from the Economy and Environment Ministries and one representative of the Finance Ministry.

The latest available figures show that in 1999, Coca Cola Slovakia produced 136 million litres of soft drinks in Slovakia, mostly sold in plastic bottles or tin cans, recording net revenues of 1.7 billion crowns.

The charges to the Recycling Fund per unit of waste are yet to be decided, but the Environment Ministry has confirmed that if it were to pay into the fund, Coke's production would see it contributing "a large amount" of money to the new body.

But the escape clause would allow any firm, or association of firms, to make payments to the Fund based on the ratio between the volume of waste they produce and the volume they recycle themselves. If a firm produces 200 tons of waste, for example, and then recycles half that amount, it will pay 50% less to the Fund.

By setting up a group to manage recycling, either on its own or with other companies, Coke says it will be able to ensure that producers themselves ensure the efficient use of their money.

Still concerned

"What we want to see is industry itself have control over where its money is going and what's being done to meet the environmental objectives laid down by the Environment Ministry. We don't want to see municipalities or ministries controlling these funds," said Coke's Štefanec.

The Environment Ministry has rejected any suggestions that the Recycling Fund would misallocate resources, citing the number of industry representatives on the Fund's board of directors as a safeguard against inefficient use of levies.

"Coke has been against this Fund from the start. They would obviously have to pay a lot of money into the Fund if they don't recycle. But the way the Fund is set up, with industry representatives on its board, there's no way the money could be wasted," said Božena Gašparíková, head of the Environment Ministry's legislative department.

However, the ministry said it would welcome plans by firms to set up their own recycling programmes.

"We would be very happy for any firm or firms to use their own methods to recycle, and not pay into the Fund. Why should they have to contribute if they are going to recycle things themselves?" said Gašparíková.

While many other European countries have implemented recycling programmes, Slovakia's Recycling Fund has no equivalent on the continent. The Czech government has worked closely with the packaging industry to establish a scheme where industry itself takes full responsibility for recycling of packaging. Czech industry in turn has been working with municipalities in a scheme that so far has been a success, say environmental experts.

But some of these same experts believe that the make-up of the Slovak Fund justifies the concerns of industry titans like Coke.

"The Recycling Fund is frankly a mess," said one environmental professional who asked not to be named. "The categories of waste are too broad, and it's not clear on what basis the charges will be levied for each waste product. The programme lacks clarity."

Pepsi Cola, which would also have to contribute to the Fund, took a more cautious approach than its global rival. Refusing to comment directly on the Recycling Fund, it said in a statement: "Our company supports transparent legislation. We are aware that only a co-ordinated approach of industry, government and the public will help Slovakia to fulfil all the requirements and targets set by EU packaging legislation."

"We are all aware that we must contribute to taking care of the environment, but there is a question over how to do that. We think that we can achieve environmental aims best if firms are left to create their own bodies to manage recycling," said Coca-Cola's Štefanec.

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