Upper Hutt Leader
The city council's controversial introduction of user-pays recycling in Upper Hutt is being legally challenged.
Set to begin in February, the changes will mean the city will no longer (from rates) pay a contractor, Transpacific Waste Management, to pick up recycling left on the kerb in plastic bags.
The council has varied an existing arrangement with Transpacific Waste Management, its long- time contractual partner for rubbish, and its recycling removal partner, to guarantee the service is available, but its approach and alleged ratepayer-funded "endorsement" of the company to the exclusion of other potential competitors is being challenged.
Lawyers for MYHA Limited, trading as Low Cost Bins, have written to the Auditor-General detailing the concerns of Low Cost Bins, an Upper Hutt-based company managed by Hugh Wiffen.
A separate complaint to the Commerce Commission has also been made by the company.
"We request that the Audit Office investigate this inappropriate activity by the Upper Hutt City Council and misuse of council funds for the benefit of a private wheelie bin recycler," lawyer Phyllis Strachan wrote.
"We submit (the council) is in breach of Section 27 of the Commerce Act by the Council promoting to Upper Hutt ratepayers their use of Transpacific for recycling purposes from 4 February, 2013.
"The Upper Hutt City Council has paid for an official notice in the local newspaper . . . of details promoting Transpacific."
A copy of a council website page which "clearly endorses" Transpacific Waste Management is also included with the letter.
"It is submitted that it is utterly inappropriate for the Upper Hutt City Council to be endorsing an individual operator in the recycling market, to the exclusion of other competitors," Ms Strachan says.
Low Cost Bins' complaint is that the council "has acted contrary to the restriction on anti-competitive behaviour specified (in the Commerce Act) by promoting Transpacific Waste Management Ltd as being the sole provider for Upper Hutt residents' recycling services from February 2013 when that is not true," the letter to the Office of the Auditor-General says.
"Currently the Upper Hutt City Council has an exclusive contract with Transpacific.
"There is no contract from February . . . as the ratepayers will shift to user pays for their recycling needs," the letter says.
The issue of ratepayers' money being used to "effectively advertise" Transpacific Waste Management as a commercial organisation is also raised by Upper Hutt ratepayer Sue Trueman.
"Transpacific Waste Management are by far not the cheapest option that ratepayers have for their rubbish disposal and I am concerned that many ratepayers may think, and have thought in the past, that they need to use TWM as it is the 'council's contractor'."
The Leader's articles highlighting that ratepayers can choose other contractors were important because until this "the council was very quiet about that as an option," Ms Trueman says.
"I have nothing against this company . . . but if dollars are being used to promote a commercial organisation then I am not happy," Ms Trueman says.
A council advert in The Leader on November 21 said it had worked with "its current contractor" to provide an immediate solution for the change of service.
"Their pricing structure and combination deals are proving popular and council hopes that other service providers will also look for innovative and affordable ways to support residents' recycling efforts," it says.
In the same paper, in a news article, the city chief executive Chris Upton confirmed there was a possible wide range of recycling providers for residents to choose from.
"The end result of this is that there is no restriction to anybody else. We haven't done a deal and we are not saying (the service) is exclusive to Transpacific Waste Management," Mr Upton said.
Mr Upton is not making any public comment on the legal action by Low Cost Bins.
- Upper Hutt Leader