Nobody should be surprised that the business behind the Re-turn plastic bottle deposit scheme pays its directors well and goes to considerable lengths to obscure just how much. But they should be worried.
Depending on how you interpret the company’s most recent set of accounts – in which it offers minimalist details about executive remuneration – the 12 members of its board could be getting almost €60,000 each in director fees. This figure is arrived at by dividing the board emoluments figure in the accounts of €700,000 by 12. The board members include executives from Coca-Cola HBC Ireland, Britvic, Heineken, Musgrave and Diageo.
The alternative possibility is that the lion’s share of the €700,000 goes to chief executive Ciarán Foley, who sits on the board as well as sharing in an additional €1.4 million paid to senior management.
The truth presumably lies somewhere between the two.
[ Re-turn disputes its own figures as questions over executive pay persistOpens in new window ]
Either way, all this creative ambiguity is not a good look for a company that relies on the trust of the public, most of whom seem to believe Re-turn is some sort of Government-run semi-State agency or a charity.
The first thing to understand about Re-turn is that it is not a charity. It is a company set up and controlled by the drinks and packaging industry at the behest of the Government in order for the Republic to comply with its recycling obligations under European law.
Its legal structure is something called “a company limited by guarantee”. What this means is that it has no shareholders and ownership of the company is vested in its “members” who are also its directors. Because it has no shareholders, any profit it makes stays within the company.
The drinks and packaging industry’s control of the company and its cash is exercised via their right under the firm’s constitution or founding document to appoint eight out of the 12 members or directors. The chief executive is also on the board, and there is an independent chairman and two independent directors – appointed by the drinks and packaging industry directors. The packaging and drinks industry calls the shots at Re-turn.
As a limited company, Re-turn is subject to the same sort of supervision and regulations as any other company, but the Government has no direct role and thus no say in how much it pays its board and its executives, or what it does with its cash pile of €60 million.
It is not unusual in Europe for governments to delegate their responsibility under EU single-use plastics legislation to the industry itself. It is in keeping with the “polluter pays” principle, although it is hard to see how the packaging industry is paying via Re-turn.
The model adopted here has been used in various forms by most EU states, with varying degrees of oversight. The level of oversight of Re-turn would appear to be very much at the light-touch end of the scale.
Government “approval” of Re-turn as the industry’s solution to single-use plastic bottle recycling lasts for 10 years and is subject to review every three years.
But the review process seems ill-defined. Re-turn must produce an annual report. It must also provide regular updates to the Department of the Environment, which monitors its compliance with the conditions of its approval, according to Minister for the Environment Darragh O’Brien.
The extent to which this arrangement covers what the company pays its chief executive and directors is not clear but, strictly speaking, it is probably not O’Brien’s business.
It is worth noting, however, that board fees of €60,000 per person would be high for an Irish company quoted on the stock market, never mind a semi-State body like the ESB. Directors often don’t even take a fee for sitting on the board of a charity or a not-for-profit.
[ Deposit return scheme: ‘As an environmentalist I truly hate it’Opens in new window ]
But what should really concern the Minister is what Re-turn has in mind for the €60 million cash pile that it has accrued in just two years of operation. The company says it plans to hold on to the money – which represents unclaimed deposits – claiming that it may one day have to refund all the unclaimed deposits, which seems unlikely.
Assuming the maximum deposit of 25 cent, the figure implies 240 million plastic bottles are out there still waiting to be returned. That’s almost 60 bottles for every adult. I think we would have noticed them at this stage.
It’s likely that Re-turn will eventually make a provision in its accounts for future claims, freeing up most of the cash pile. It will not be donated to charity but instead reinvested in “related circular economy projects”, which covers a multitude of possibilities, all presumably of benefit to Re-turn’s promoters.
It seems a little bit naive to leave the fate of what is in effect a publicly funded windfall in the hands of a privately controlled company that will not even be transparent about what it pays its chief executive and directors.
