Molhoek said evidence pointed to serious governance failings, unresolved conflicts of interest and complaints that he alleged were not resolved in a timely manner by the former government.
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The committee referred 10 allegations to the Crime and Corruption Commission for investigation.
Molhoek said the scheme was administered by a not-for-profit company, owned by two of Australia’s largest bottlers, “effectively handing them monopoly control”.
He said COEX held substantial retained earnings, with no clear policy for using those funds for environmental or charitable purposes.
“Instead it appears those reserves have been used to reduce the bottlers’ own contribution rates, effectively transferring value from Queenslanders back to the beverage manufacturers that controlled the scheme,” he said.
“Let’s be clear, it’s everyday Queenslanders, mums, dads and kids who pay for this scheme.
“They cover the costs of the refunds as they are all built into the wholesale price of every drink they buy.”
Molhoek said COEX’s commercial relationship with Circular Economy Systems (CES), a joint venture between its two founding members, Coca-Cola and Lion, had received significant and increasing payments, and it also provided the payment technology underpinning the program, giving it access to large amounts of consumer data.
He said the broader community benefit was “overstated”, with the scheme generating $2.5 billion in revenue, with less than 40 per cent given to Queenslanders through refunds, and less than 2 per cent directly going to charities.
Molhoek said it appeared the problems were “baked into” the scheme’s structure from the start, and COEX was appointed without an open tender process.
The committee made 21 recommendations, including stricter oversight, ministerial approval of a plan to invest surplus revenue, mechanisms to improve recycling rates, ways to increase bottle recycling in workplaces and unit blocks, and more reverse vending machines.
It also recommended the minister consider expanding the eligibility of containers in the scheme. Milk and juice bottles are excluded, but wine and spirit bottles were added in 2023.
In 2023, this masthead revealed COEX was required to recover and recycle at least 85 per cent of the bottles and cans sold in Queensland by 2021-22, but it only reached 62.9 per cent, meaning people missed out on pocketing $65 million.
Despite that being grounds for the government to tear up the contract, it did not.
The inquiry’s report showed Queensland’s container recycling rate had increased from 18 per cent before the scheme to 67.1 per cent this year.
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