Monbat Group is confirmed to operate in compliance with the respective legal and regulatory requirements
Corporate
The results of the independent review by the international law firm Wolf Theiss have been announced
As per the independent review undertaken in early June and conducted by the international law firm Wolf Theiss, Monbat AD and Monbat Recycling EAD have a good level of organizational, documentary and operational controls and measures for compliance with the IPPC (complex) permit and the requirements of the applicable environmental and waste management laws.
This is supported by the findings of the relevant authorities’ inspections – both regular and following the publicly known circumstances that focused media attention on the group.
Another area of examination in the independent review is the management and control of trans-border hazardous waste shipment. It shows that Monbat Recycling has no irregularity about declared quantities, the incoming and outgoing flows are only in relation to materials and waste related to its production and no illegal import/export was made.
Processing of RDF waste (household waste) is incompatible with Monbat’s technological capabilities and Monbat Recycling has never been engaged in this segment of waste management.
The lower cost resulting from the choice of local vs. international operators for utilization of lead slag and polyethylene separator – the technological end-waste from the recycling – was also examined as part of the independent review. It corresponds to an yearly benefit of approximately EUR 174 thousand. In comparison to the cost structure of the companies in the Monbat group, this added value is under 1% (only 0.11%) and does not represent a structural cost advantage which would have a significant impact on the group’s profit.
It was also confirmed that Monbat is not a direct or indirect owner of the operators engaged in the utilization of end technological waste, nor has the company entered fictitious contracts. Moreover, Monbat Recycling has included additional contractual requirements for operators, such as utilization certificates, which have secured its contractual position.
The review of Wolf Theiss shows that Monbat Recycling conducted appropriate documentary processes to confirm and validate the information whether the operators of utilization services possess the necessary permits and licenses under the law to carry out the activity.
Ahead of Wolf Theiss’ recommendations, Monbat’s management has introduced additional steps in the selection and approval processes for service providers, by conducting a full revision of the current portfolio, including an inspection of the operational viability of each new counterparty.
In additions to the actions already taken, Monbat will intiate a proactive operational audit of all operators to whom polyethylene separator has been submitted over the years. Pursuant to the recovery utilization plan to be launched by Monbat, the company will try to identify the part of the separator that has not been utilized and originates from Monbat for all operators with operational inefficiency. This is necessary because, as it is known from the public registers, Monbat had not been the only customer of these companies. The unused share of the identified polyethylene separator will be gradually drawn out, with Monbat committing to its final utilization.
Monbat has already notified the Ministry of Environment and Water (“MoEW”) of its position, as well as of its readiness to propose and ensure the implementation of a recovery utilization plan, taking into account the administrative assistance from the MoEW, which accompanies the process.
Regarding taxation, there were several concurrent tax reviews and full tax revisions concerning Monbat and Monbat Recycling initiated by the National Revenue Agency (“NRA”) in parallel to the Review of Wolf Theiss. As of today, all NRA reviews were closed and the same did not evidence any tax issues. The full tax revisions which cover the period 2014-2019 are yet to be completed but as of today no material tax issues have been identified.
The Summary of Environmental Legal Compliance Review Findings from Wolf Theiss and the Executive summary of conclusions announced from the Board of Directors of Monbat AD can be found on the corporate website of Monbat: https://www.monbatgroup.com/en/media/news.
The management of Monbat has refrained from commenting on the various speculations in the public domain. However, based on this independent review, its own internal investigations and the information provided as part of the review conducted, the Company reserves all legal rights in respect to the continued dissemination of wrong and misleading information.