Recycling giant Ricova is threatening the City of Montreal with legal action if it tries to terminate its Montreal municipal contracts, as suggested by the Office of Inspector General (OIG) in a report released last month.
Posted at 6:14 p.m.
In its devastating report, the BIG recommended that the City terminate “as soon as possible” its contracts with Ricova, which holds the virtual monopoly of recycling in Montreal. The BIG accused the company of having used deception to sell the materials recovered in the metropolis abroad, without handing over its fair share of the revenues to the City, potentially frustrating the public treasury of millions of dollars.
The organization also recommended that Ricova and its leader Dominic Colubriale be banned from public contracts in Montreal for five years.
But Ricova counterattacks. “If it turns out that the municipal council of the City of Montreal follows up on the recommendations [du BIG] or to one or other of the opinions of the Inspector General contained in the report, the appropriate legal proceedings would then be brought against the City of Montreal,” wrote the company’s lawyer, Ms.and Julie Therrien, in a formal notice sent to the municipal authorities last Friday.
In its report, the BIG denounced the fact that Services Ricova, which operates the Lachine and Saint-Michel sorting centers, sold recyclable materials collected in Montreal to Ricova International, a company of the same group. Dominic Colubriale controls both companies.
Thus, a ton of recyclable materials sold for $100 to Ricova International could then be resold for $200 on the market. However, it is the price of $100 per tonne that is declared to the City, for the payment of the royalties due to it.
According to Ricova, nothing in the contracts signed with the City prohibits this way of doing things. The company argues that Ricova International already bought the recyclable materials that came out of Montreal sorting centers when they were operated by other companies.
“Ricova has in no way breached its contractual obligations. The OIG report contains falsehoods, inaccuracies and omissions likely to vitiate it completely,” said Ms.and Therrien in the formal notice.
The lawyer maintains that the arrival of the company in the market for the collection and transport of residual materials has lowered the price of services in Montreal.
“And now, the BIG wants to suggest that Ricova and Mr. Dominic Colubriale wanted to illegally defraud the City of Montreal of millions of dollars,” laments Ms.and Therrien.
It therefore puts the City on notice to “not take any action on the OIG’s report”.