Member companies of a newly formed cooperative are complaining the government has hurried a consultation process over a draft Legal Notice and are accusing it of "shifting the goalposts" of the environment tax framework.

Malta's largest co-operative incorporating the 300-plus members of GreenPak, the private, five-year-old waste recovery scheme, was registered earlier this month to lobby government to refund them millions of euros in eco-contributions paid since 2005. Meetings with government officials about the matter were held last week.

Launched at a press conference last Wednesday, the co-operative presented the new picture painted by a draft legal notice issued last month. The organisation was encouraged by the "conciliatory tone" of a joint statement by the Finance and Resources Ministries a few hours later which pointed out the draft legal notice was open to consultation. But an e-mail received by GreenPak late on Friday afternoon dashed that perception, as decisions had been taken and the scheme had to put forward its own proposals on these decisions by December 15.

"That gives us around four working days as there are two public holidays and two weekends until that date," GreenPak chief executive officer Mario Schembri told The Times Business. "We have asked for an extension so that we can present our position on the matter in the best way we can. The government said it has consulted interested parties on these latest decisions. If it has, consultations must have been held with others but not with GreenPak."

Martin Borg, the co-operative's acting secretary, added: "Our members have met their legal obligations and are entitled to the refunds - some companies are owed hundreds of thousands of euros, one as much as €800,000. What is worse is that we have waited for over four years for the methods of refund calculation to be published. Now the government is launching a pilot scheme in January to ascertain methods of refunding. The pilot scheme should have been introduced in 2004 when Malta joined the EU, not now."

The pilot scheme has been extended to part of the beverages industry and covers 'free-riders', companies which have not been fully compliant with waste recovery obligations, Mr Borg said. The legal notice was back-dated to July 1 to grant amnesties to companies which joined schemes before that date, he added.

Under the new government proposals, refunds are only applied to three particular clusters of products meaning that the vast majority of companies that paid eco-contributions and have been part of a waste recovery scheme since 2005 are not entitled to refunds.

Member companies are no longer entitled to a full refund but to a maximum 80 per cent. There is also a recommendation that if a waste recovery scheme does not meet its legal waste recovery targets, all member companies risk losing out on their exemption - even law-abiding member firms.

Other proposals included waste recovery schemes operating kerbside collections.

"The authorities have stopped at legislation and there is no enforcement," the cooperative's Pierre Fava argued. "The original idea was that the business community would self-regulate, but in our culture that will take a long time. Now the government is proposing to induce more costs. If the scheme is licensed by the Malta Environment and Planning Authority, why should individual firms audit the scheme, not Mepa? This presents us with an added expense."

Mr Fava said it was safe to say companies were owed millions of euros in refunds but it would be a mammoth task for GreenPak to collate all the figures as eco-tax varied from €0.05 on some units to €70 on white goods. All member companies were registered with Mepa for the provisions of the waste recovery scheme.

"We have no problem with working in an open market," Mr Fava emphasised. "But there is much unfair competition, particularly from parallel trading. Meanwhile, the government-induced costs just keep mounting: eco-contributions, VAT, scheme membership fees. Operating within the law costs a lot of money. The consumer does not seem to see that we contribute to the business chain, they only accuse us of raising prices."

The cooperative says the proposal for schemes to operate kerbside collection is "biased" in favour of another scheme which counts waste collection operators and company owners as its members.

Pro-Europe, the umbrella organisation for European packaging and packaging waste recovery and recycling schemes, of which GreenPak is a member, prohibits vertical integration: waste collectors are not allowed to be members.

Mr Schembri explained GreenPak had "no problem" with kerb-side collection but the system had to evolve to achieve greater efficiency. The waste recovery from bring-in site collections is low and more can be recovered before embarking on the more expensive kerbside collection. Typically a collection rate of around 35 per cent is expected through such infrastructure. With the 2013 EU target set at 60 per cent, rather than collecting three materials once a week, GreenPak would propose the collection of a single material of waste at a time.

On a national level, Malta was only recovering 10 per cent of its national packaging waste, he warned, adding that Malta faced hefty EU fines for non-compliance in the next few years.

"The government attitude is hitting law-abiding companies hard," Mr Fava said. "We are missing the money and our cash flows are suffering in the current climate as non-payments are also a major problem. Now we have until next June to apply for the refunds we are owed and the government has six months to decide on its method.

"That means we will not see a cent until 2011. Privately, we fear we will never see the refunds and we will have to face the consequences of losing that cash. The government is dealing with law-abiding businesses here and it is failing to protect them. It seems that it pays to break the law."