Category: Archive – 2008

Diethylene Glycol (DEG) – its use to be provisionally banned as an ingredient in oral hygiene products

On the basis of concerns expressed by some Member States regarding the use of diethylene glycol (DEG) in cosmetic products and in particular, the French decision relative to cosmetic products to provisionally ban the use of DEG as ingredient in oral hygiene products and a limitation of DEG as a residue in glycerol of up to max 0.1% and for polyethylene glycols a residue content of diethylene glycol of up to 0.4% for the sum of diethylene glycol and ethylene glycol, the SCCP was consulted.

 

The SCCP delivered its opinion on 24 June 2008 (SCCP/1181/08) in which it concluded that:

"SCCP is of the opinion that diethylene glycol (DEG) should not be used as an ingredient in cosmetic products including oral care products. This opinion is based on the fact that more than 600 deaths have occurred due to DEG mass poisonings. Although most of the deaths have occurred after oral intake, deaths are also reported after dermal exposure. In addition, reliable data in line with present guideline requirements on non-lethal repeated dose toxicity and dermal absorption, which would allow assessment of the safety of use in cosmetic products, is not available. SCCP is of the opinion that a maximum concentration of up to 0.1% DEG from impurities in ingredients like glycerine and polyethylene glycols in the finished cosmetic products can be considered to be safe".

 

Actions envisaged by the Commission

The Commission is considering introducing the following entries in Annexes II and III of

Council Directive 76/768/EEC relative to cosmetic products:

In Annex II

Diethylene glycol (DEG), Cas No 111-46-6, for traces level see Annex III.

In Annex III

Diethylene glycol (DEG) with Cas No 111-46-6; Traces in ingredients like glycerine and polyethylene glycols-maximum authorized concentration of 0.1%.

For more information please contact Abigail Mamo @ GRTU.

 

The construction sector represents 15% of valueadded of the manufacturing sector in the European Union. However, this substantial figure is not reflected in the same manner in the internal market, given that it is estimated that the sector only contributes to 5% of inter-State trade.

The European Commission is proposing a new regulation, founded on the current legislation on construction products, aimed at facilitating trade in this sector. The range of products considered is broad (over 40) and includes doors, cement, roof products and any other product which is placed on the market to be permanently included in construction work.

It seeks to address deficiencies identified in the current legislation and emphasises on the need for more clarity, including the precise definition of the subject-matter and the more important concepts in the internal market for construction products. It will determine the exact definition of the ‘CE' mark for these products, introducing new and stricter criteria on the notification of entities acting as third parties in the evaluation and verification processes on the consistency of the products.

Simplification remains the main purpose of the proposal. The Malta Standards Authority (MSA) has initiated a consultation process whereby all stakeholders in the sector, particularly with regard to the internal market, may pass on their comments. For further details, kindly contact our office or send an email to Abigail Mamo @ GRTU.

 

 

Do you employ an apprentice?

A meeting in Paris is being organised for apprentices, GRTU would like to invite the apprentices working with your company to patricipate. The meeting is intended to promote apprenticeship in Europe and it will combine 10 000 European apprentices.

 

 

When?

On the 3rd of October from 10.00 am to approx. 1.30 pm in Paris Bercy (Quite central in Paris).

Accommodation

Their arrival will be on the 2nd of October and they will leave on the 3rd. This night will be paid for by the EU and the booking will be made by the EU as well. Lodging will most probably be in hostels.

Transportation and Transfers

The EU is paying for the participants` transportation from the airport to the accommodation and vice versa.

Lunches

The EU is taking care of the breakfast at the accommodation and the lunch through the distribution of lunch boxes at the end of the event.

 

The participants need to take care of extra expenses and meals during their travel and for all complementary days/ nights they would like to stay in Paris. Participants also need to take care of their travel insurances.

Please note that able to communicate in English is a must. Your apprentice will not be alone but will be going with a group of Maltese apprentices and will be accompanied by a tutor.

Those interested can contact Abigail Mamo @ GRTU. An answer at your earliest is highly appreciated.

The European Commission has recently published a document on the issue of industrial property rights. We are expecting that an EU consultation exercise specifically on trademarks shall be initiated later on this year, thus it is evident that some legislative action on this front is in the pipeline.

The Communication outlines a number of points, particularly the need for a Community patent (ie. one patent covering the whole Union), and the need for an integrated EU-wide jurisdictional system to improve dispute settlement and legal clarity. It however also speaks of the "vitality" of patents driving invention, rather than patent offices being inundated with non-innovative applications. The European Commission is expected to conduct a comprehensive study on patent quality and is inviting Member States to assess their methods' contribution to innovation.

The Commission is also set to evaluate the current trademark system which could then lead to a review of the system. As indicated earlier, consultations with stakeholders are to be expected, including within the European Business Test Panel setup (to sign-up: http://ec.europa.eu/yourvoice/ipm/forms/dispatch?form=250&lang=en).

With regard to agricultural produce, the European Commission is indicating that it shall publish a Green Paper on agricultural product quality covering product standards, production requirements and quality schemes in the framework of a geographical indication system. It is also planning to conduct an assessment (once again involving stakeholders) on the feasibility of geographical indication protection on non-agricultural products.

The document also speaks on transparent procedures during standard-setting processes, the problems caused by abusive practices and its plans to study IPR and standards vis-à-vis innovation as well as standardisation in the ICT sector.

For SMEs the emphasis is laid on better access to registration (which includes a possible review of the fee structure for a Community patent), dispute resolution, enforcement of rights and rights management (where China's IPR helpdesk may be assessed).

The Commission also speaks of further action by Customs authorities, raising public awareness to change public perception of counterfeits and pirated goods (among many measures being contemplated including reducing internet traffic in the fight against counterfeits), and working with third countries and the international community on various fronts.

The European Commission's Communication can be obtained by contacting Abigail Mamo @ GRTU. Please do not hesitate forward to us any comments you might have.

 

GRTU presented MEPA Chairman Austin Walker last week with its preliminary proposal regarding the MEPA reform, based on the general perception of the developers.

 

 

GRTU's position was built through a cause and effect analysis and the identification of problems were analysed by asking:

What is the problem?

Who is affected?

When does it occur?

Where does it occur?

The meeting was chaired by Paul Abela- President; Vincent Farrugia- Director General  and Sandro Chetcuti- President of Developers Section at GRTU. Vincent Farrugia explained that  the central problem in MEPA is one of managment. The main identified problems identified are as follows:

Improving the decision process at all levels with related accountability timeliness and consistency

Improve management structure by reviewing performance of key people in key positions.  Consider merging the roles of the directors (i.e. DG, DOP and DOE) into one as a CEO function.  If necessary consider golden handshakes to remove staff.

Improve  current liaison office into a fully fledged customer Call Centre (possibly with extended hours)  

Consider the removal of chessclock mechanism in Development Control 

Set up one full time DCC board with competent professionals (good remuneration) with environmental permitting competencies included.

Review workings of Major Projects as a negotiating team

Set up continual training programs for DC staff

Initiate process of merging the Development Planning Act and the Environmental Act.

To be able to tackle current backlog within the ODZ team ( around 900 cases)  the introduction or redeployment of 5 case officers is necessary

Consider the introduction of MEPA being made liable to damage due to its administrative mistakes.

Streamline DC consultation process (one stop shop) however outside agencies should bear responsibility for non-response.  (Exception : Museums Department)

Development Briefs for Government projects should be done outside of MEPA

Review of local plans (rationalization sites)  needs a more professional approach

New Structure Plan to be published (sustainable development to be the main driving force

Review the setting up of an EIA Commission (on the Dutch Model)

These points obtained unanimous agreement amongst the floor composed of the property section of GRTU, some other points were however raised. A prominent point was that the chairman should meet regularly with the employees at MEPA to give them one direction.

The developer's section has been hurt numerous times by the inefficiencies and inconsistencies of MEPA, a case in point being that when one has a deemed approval MEPA should be obliged to issue the permit and not be subject to interpretation. More importantly when a permit is issued it must not be revoked afterwards.

It was agreed that MEPA should never unless in extraordinary circumstances move away from what is written in black and white. When MEPA decides to differ from what is written this should be given to everyone. For extraordinary cases where the written procedures do not give clear enough guidelines a board should be set up to decide. The are several mistakes and missing parts in the Local Plan and therefore it should be redone for 2008 and only this would apply and the ones before become irrelevant. This would alleviate the problem with interpretation.

It was emphasised that there should be a period of time in which objectors can complain and that any changes in MEPA guidelines should undergo a transition period, in which the change is not applicable to pending cases.

GRTU will be meeting with the Prime Minister to discuss the proposals in more detail. Any comments regarding the reform are welcome.

 

Hon George Pullicino, Miniter for the Resources and Rural Affairs, has assured Green MT CEO Joseph Attard (GRTU's managing company on environmental schemes) that the license to Green MT to operate a packaging waste compliance scheme will be issued shortly and that the Minister is extremely satisfied with the excellent work Green MT is doing to ensure the success on the Tuesday Waste Separation Collection Scheme.

Minister Pullicino assured CEO Joe Attard that the processing of Green MT's application to operate such a scheme is at an  advanced stage  and that MEPA will be issuing the relative permits shortly. For all intends and purposes Green MT's Waste Packaging Compliance Scheme has been given  the green light by  the authorities.

For several years we have heard of plans for Bisazza Street to be changed to a pedestrian area. So many talks and discussions have taken place, so many unfruitful meetings were held with business entities and all concerned. Finally this project is about to see the light of day.

GRTU has held various meetings with the Minister concerned, the business community and other effected parties during which  the following issues were discussed;

clear plan of the proposed project

alternative parking

distribution of goods

traffic management

clear date for commencement of works

Both recently and also in previous years various plans were presented and brought up for discussion. The Business Community to date are still in the dark of how and when this project will be finalised. They are unhappy and concerned about the lack of parking facilities and are insisting that the existing parking will remain as is and that any parking spaces lost due the introduction of this project will be replaced.

The Minister, Hon George Pullicino, informed that this issue is being taken seriously and a study is underway so that a solution will be found for the benefit of all in the shortest possible time. He also informed that if the study would be a success the parking facilities would be increased.

Once Bisazza Street would become a pedestrian area, Government would then be providing a free service for the distribution of goods and services. This service will be carried out by means of electric vehicles from the loading/unloading bays provided. Special permits would also be issued by the authorities concerned for emergencies and other important services.

It is being envisaged that the embellishment will commence from Tower Road in October, and will be finalised by the end of November 2008. It was suggested that during these months Bisazza Street would be occasionally closed on trial periods and that the public and all concerned be informed of traffic arrangements through the media. A survey will then be carried out following which all proposals and findings would be presented for discussion with Government and all concerned.

GRTU, through its fully owned subsidiary, Green Mt Limited would like to clarify the position in relation to its continued commitment to implement environmental legislation in a correct and sustainable manner.

 

GRTU's involvement and commitment goes way back a couple of years when it contested at large the introduction of a national refund scheme which would have burdened the public and retailers at large. However saying this, GRTU was committed to come up with a solution in respect to the collection of waste packaging.

GRTU had over two years ago provided government with national figures detailed in liri and cents in relation to an upgrade in collection of both organic and separate waste.

After long discussions in early 2007, GRTU decided to set up its environmental company, Green Mt Limited with full authority to set up Scheme Agreements that will enable business owners to meet their legal obligations at minimum cost and with the approved EU Directive. The subsidiary was established in mid 2007 and since then the company has obtained an operating permit for a Waste Electrical and Electronic Equipment Scheme and a permit for Waste Packaging is due by the end of July.

In relation to Waste Packaging Scheme (WPS), Green MT placed an application with MEPA as the Competent Authority in July 2007. Subsequently after discussions with Minister George Pullicino, this was put in abeyance so that the  three other Constituted bodies; Chamber of Commerce, FOI and MHRA, would together with GRTU form a company and hopefully operate a holistic Scheme. We were also advised By the Minister that we are not to reinvent the wheel, and as such the bodies together formed a task force for this project and had discussions with the already authorized WPS operated by GreenPak Ltd.

After a number of meetings, it transpired that Greenpak never placed all their cards on the tables in relation to costs and its operational framework, and that was proof enough to all the bodies then present on the negotiating table that this was not acceptable to our members. Business men were responsible at law for waste and they needed a 100% assurance that if a monopoly was to be created that they had the full confidence of the business community.

The Constituted Bodies, GRTU, Chamber of Commerce, FOI and MHRA were not satisfied that the quarterly and annual reports submitted by Greenpak Limited to MEPA according to their operational permit, up to March 2007, as these showed that these certificates showed that Green Pak had till then only 27 members placing on the market 358tons of Packaging waste. This proved that Green Pak did not have the necessary ability to meet the obligations as required at law and respected by business men.

The annual report for Greenpak ending 2007 shows that the Scheme has 93 members with a total registered tonnage of 2808 tonnes, placed on the market. This is only just over 4.6% of what is placed on the market today. Also to be noted is that the Certification of Recycling Processes and actual receipt of the waste packaging collected by this Scheme leave much to be desired.

GRTU believes from the evidence at its disposal, certificates were issued illicitly by two companies who do not have the authority at law to do so. Further more there is no audit trail of the waste which we are advised went for ‘export/recycling'.  Even worse the certification notes that 62 tonnes of Metal was sold or forwarded to a' local scrap merchant" which is not permitted at law.

It is also to be noted that the annual report submitted by Greenpak shows a collection of 1375tonnes which is just over 47% of the amount its members placed on the market. However it is also to be noted that these certifications show the following:

The facility which issued the illicit certification for the receipt of goods from Greenpak stated that it received 2.49 tonnes from 10thApril to 26th June 07,  599 tonnes on 30th September 07, and remarkably 766 tonnes on 21st December 07, a few days before the close of the calendar year.

Unless the company who actually received these goods forwards to MEPA the audit trail of how these goods were received and a definite audit trail of the goods, i.e. 279 tonnes of glass are mentioned to have been used in local road construction, then we will continue to state that the reports issued by Greenpak are just a paperwork exercise and continue further by saying that they are misleading their members accordingly. Their members would still carry the legal liability if it is found that the Scheme is operating in an irregular manner.

Based with these facts and the continued lack of openness from Greenpak, the Constituted Bodies informed the Minister for Environment that they will be setting up their own company as discussions with Greenpak had come to a halt.

The task force continued discussions until May 2008, when a meeting was held for Presidents and Director Generals of each of the constituted bodies.

During this meeting there was no agreement on the appointment of the Chief executive Officer of the Company and also on whether the Scheme would cater for a curbside collection.

The Constituted Bodies were aware from Day1, that obtaining an operating permit from Government required the inclusion of curbside collection and this involved the waste carriers which are duly represented by GRTU. To the other bodies, this was looked upon as a conflict of interest.

Today, GRTU, through Green Mt Limited is proud to make everyone aware that in coordination with Government, Ministry of Resources and Rural Affairs, it takes care of the logistics for Recycle Tuesdays, inclusive of complaints and also recommendations or suggestions. GRTU basis its efforts on facts not on words. Recycle Tuesdays is here to stay and GRTU, through Green Mt will make sure it takes this operation over once it has an operating permit for the Waste packaging Compliance Scheme.

After the halt in discussions, Green Mt, worked on an operational plan for a permit to operate the Scheme on a NOT for PROFIT basis, in accordance with the terms of reference given to it by MEPA in August 2007.

GRTU, through Green Mt Limited has discussed and met all stakeholders involved in order to operate a holistic Scheme. The Local Councils Association has been a tremendous help in this aspect and we will continue to work with all those who have at heart the best of waste collection services for their localities.

We have also met and continue to meet representatives of the beverage sector and the entertainment and hospitality industry. We are on the way to reforming waste collection from a number of aspects.

We have also had continued meetings with Wasteserv as the Scheme to be operated by Green Mt confirms its willingness to use the Materials Recovery Facility at Sant Antnin, which is the only approved facility in Malta of the sort. And it is here that we would like to point out to the Competent Authority that Schemes must operate on alike for like basis.

Schemes need to have the same operational criterias, we cannot be enforced as a Scheme to use the facilities at Sant Antnin and others use facilities with no permit. In real terms this means that we are paying a fee for separation and have an agreement with Wasteserv that they will forward also audit trail of recycling processes of where the waste packaging will be exported, whilst other Schemes would be allowed to use these unpermitted facilities at merely a penny of the cost it will cost our Scheme.

GRTU is totally surprised at recent statements made by the Chamber of Commerce to support GreenPak when it well knows that the operations of the same Scheme leave much to be desired, and they cannot give to Chamber members and other enterprises the guarantees that the Chamber of Commerce, FOI, MHRA and GRTU have been insisting all along; that the scheme operated by GreenPak is accordingly operating its Scheme to EU Directives and infringement will not revert back to the enterprise taking part in their Scheme. This is the commitment that the Scheme operated by GRTU will satisfy.

 

GRTU, through Green MT Ltd, confirms that it will shortly have a permit to operate a NOT for Profit Waste Packaging Compliance so that all producers can join and be in conformity to Legal Notice 277 of 2006 with the security that their legal obligations at law are being taken care of.

 

GRTU's advice to Maltese businesses and enterprises is to disregard the Chamber's of Commerce advice and to await the Ministry of Resources and Rural Affairs final approval of the GRTU proposed Scheme and then to take a final decision only when two Schemes are available on the market.

 

 

When the White Paper was published, GRTU sought and continues to seek the views of commercial tenants and others interested in this important aspect of the commercial, retail and craft enterprise scene in Malta and Gozo. GRTU is the only national organisation that represents business interests at locality level in all towns and villages of Malta and Gozo and the sustaining of economic activity in the localities is a main platform of GRTU.  The comments of GRTU on the White Paper are highly influenced by this consideration.

On the basis of the comments received at GRTU so far and from the returns of surveys conducted among businesses that are affected by the proposals of the White Paper, and based on the survey conducted among a wide cross section of businesses operating from rented commercial premises, GRTU presented a paper for discussion by the National Executive Council. Resulting from this analysis and discussion, the GRTU has presented Government with the following views and recommendations.

 

1.      Separation of proposals between Residential and Commercial Rented Properties

The results of the survey indicate that the number of enterprises that will be affected by the changes proposed in the White Paper is very large. The GRTU's first comment is an expression of concern that no statistics and division of businesses by categories and localities affected have been provided in the White Paper to sustain the recommendations of the Working Committee.

The Executive Council of GRTU discussed the situation Government is presenting and the common feeling is one of great preoccupation starting from the fact that the proposals for Reform of Rent Laws for Commercial Properties are being included in the same package of proposals effecting the renting of Residential Properties. GRTU considers this to be a great error as the reforms refer to two situations that are very different. Different situation require different solutions.

Indeed while the proposals for the residential properties are detailed and provide possible solutions that logically emerge from the facts and figures published, the proposals for commercial properties present solutions that are sustained by no established statistics.

Recommendation 1: The Rental Laws Reform should be presented in two separate exercises: one referring to Residential Properties; the other referring to Commercial Properties. The Commercial Properties Rent Reform should at this stage be postponed and be represented at a later stage. 

 

2.      Independent Commission

Recommendation 2: The setting up of a Panel of Experts/Independent Commission composed inter alia of Architects and Lawyers that will include nominations from GRTU in representation of enterprise tenants of rented commercial properties. This Panel/Commission will study the issue in depth and will present proposals that whilst safeguarding the security of tenure of licensed commercial, craft and service, owner-managed enterprises, will ensure sustainable returns to property owners and the necessary fiscal incentives to encourage the evolvement of the property rental market. The Commission's new task will recommend how property owners` rights and the rights of security of tenure of enterprises operating from rented properties can co-exist to the benefit of enterprise and economic growth.

 

3.      Government owned property

The White Paper recommendations do not clearly distinguish between properties that are Government owned and those that are owned by the private sector. Property laws are in a number of ways different from these two sectors. Government has over the years used government own properties as part of its promotion of and assistance to entrepreneurial activity. Although Government property does not fall under the same obligations as do property which is privately owned the rents and conditions applicable on the market have evolved on similar lines and effectively a market has grown over the years capable of dealing with the law in operation.

The White Paper is very shallow in its analysis of the current state of the market for pre-1995 rented properties. 

Recommendation 3: Government should continue to consider private owned properties as distinct from government owned properties and these two sectors should be treated as separate. The use of Government property as a tool of assistance to enterprise, including preferential rental treatment, should continue within the framework of an agreed small business promotion strategy within the limits prescribed by state aid regulations. 

Recommendation 4: Government should not make any distinction in its support to enterprise between properties rented to self employed business and to enterprises registered as Companies or Civil Partnerships when these properties are rented for licensed enterprise purposes.

 

4.      Government intervention

GRTU has always sustained the idea that the legislator should not intervene when the intervention is not absolutely necessary; when intervention would create more harm to the economy and when the legislators` intervention is at the expense of contractual obligations reached between the two parties. The proposals in the White Paper have extended beyond this limit as Government is proposing that the legislator should intervene between two contracting parties, and is interfering with individual enterprises business plans based on existing contractual obligations reached within the framework of existing laws.

Recommendation 5: Any reform should not interfere with any contractual obligation reached between two parties or where the possibility for a contractual agreement existed even if none of the parties preferred to make use of it and where no law prohibited action that contracting parties could freely adopt.

 

5.      Enterprise approach

Ever since the introduction of the safeguards referring to commercial properties rented to enterprise, the GRTU steadfastly insisted with different Governments that the safeguards available and sought by GRTU are safeguards to ensure the security of tenure of enterprise owners operating from rented commercial properties. The issue raised by GRTU has consistently been one related to the security of tenure of operating licensed enterprises as GRTU considers, as it is its prime responsibility to do that small and medium enterprises of whatever genre need legal safeguards against summary dismissals from their licensed premises and the indirect takeover of business operating from rented properties by the executors of the eviction.  

Recommendation 6: Any proposed reform package cannot be understood to be simply a package of reforms of rental laws.  Reforms that effect rented commercial properties should in the first instance be considered and intended as updates to the safeguards of enterprises provided by the legislature within the context of rental laws.

It is not acceptable by the GRTU that under the excuse of rental law reform important safeguards for small enterprises are wiped away.  

Recommendation 7: GRTU contends that in the same way that employees, and wage earners are provided with legal protection against unfair dismissal, self employed business owners whose livelihood, that of their families and of their employees depend on the enterprise operating from rented properties should continue to enjoy the safeguards that exist under current legislation ensuring that their livelihood will not depend on the whims of the property owner renting the enterprise property.

Recommendation 8: The underlying principle of the Reform should not be the Rental Laws but the Safeguards of Enterprises Operating from Rented Properties (rental laws being one set of instruments that provide a number of these safeguards).

 

6.      Giving a buying option

GRTU feels that the Reform should include incentives and options that give the possibility of a safe landing to the enterprises that will be very negatively hit by the Reform. GRTU proposes that the reform package should include precise forms that enable entrepreneurs in rented commercial properties to buy the property on favourable terms not unlike schemes that have been provided for tenants in Government owned residential properties.

Recommendation 9: Enterprises operating from rented commercial premises should be given the opportunity to buy and acquire the property at commercial value with discounts set according to the number of years the business has been occupying the premises. The business would also be allowed recognition for the investments done in the property. The credit for the number of years the property has been occupied together with the credits for the value of the investments done in the property should together obtain a maximum discount on the market value of the property of up to 50%. Suitable tax credits should be made available so that tenants would be encouraged to take this option. Moreover this option should apply irrespectively of whether the rented property is privately owned or Government owned.

Recommendation 10: the safeguards and options available for the purchase and acquisition of the property by enterprise tenants should apply irrespectively of whether the property is held by title of lease or of a lease subject to ground rent (cens).

 

7.      Succession of business

GRTU has over the last years raised the serious issue of succession of businesses. Unlike other countries Malta has little if any supportive schemes for the succession of family owned private businesses by members of the same family or by others.

Recommendation 11: The principle of succession of businesses in rented properties should be recognised and members of the family of the tenants or others nominated by the tenants as successors should be given the necessary safeguards so that the enterprise will continue to survive.

GRTU recognises supportive schemes for enterprise succession as very important for the future continuation of enterprise and for the fostering of entrepreneurship. 

 

8.      Business Turnovers

The recommendations as proposed in the White Paper make references to safeguards for tenants of commercial properties based on business turnover. GRTU believes that this distinction should not remain in any future set of proposals.

Recommendation 12: The safeguards to enterprise should recognise that all enterprise is important and all deserve security of tenure for the period that an active licensed enterprise operates from rented property. This irrespective of enterprise annual turnover.

 

9.      Index of rent and land evaluations

Recommendation 13: All indices for the establishment of rental values and acceptable property evaluations should be produced by an independent authorised authority that produces the indices on approved criteria. Evaluations should not be subject to the subjective measurement of individual experts operating on a case by case basis.    

 

10.  Casabottega

GRTU recognises that a number of small family businesses run their business from the same premises as their residence.

Recommendation 14: The Reform should recognise these particular situations and provide the necessary safeguards so that these self employed entrepreneurs do not lose both their residence and means of livelihood.

An important basis of the Reform remains the protection that the law gives to a trader/ craftsmen tools as being the source of the person's income and cannot therefore be forfeited under any pretence whatsoever. For independent private business the premises from which the enterprise operates is an essential tool of his enterprise.

Recommendation 15: The GRTU recommends that the premises from which a business operates is considered a vital tool for enterprise and therefore the premises should enjoy the same safeguards under the law as the tools and equipment utilized by the enterprise tenant for the generation of his and his family's income.

 

11  Change of use

The rapid changes taking place in the Maltese economy are necessitating the change of genre of business for a substantial number of old established enterprises. This transformation is today being precluded or restricted as enterprises operating from rental properties fear the loss of the enterprise safeguards that they enjoy under current laws should they seek to move on from one genre to the other to better meet current and future enterprise needs.

Recommendation 16: The proposed Reform should extend security of tenure for tenants who progress from one genre of business to new genre of business utilising the same rental property. This safeguard should by subject to a framework of acceptable and prescribed forms of compensation to property owners.

 

12  Removal of demarcation date

Recommendation 17: The reform should do away with the distinction currently existing between pre 1995 and post 1995 rental situations. The agreed package of safeguards for enterprises operating from rented properties should, unless contractually agreed differently, be equal irrespective of whether the rental arrangements were reached pre or post 1995.  

 

13  Return to the original investment made

Recommendation 18: In their deliberation the Panel of Experts assessing property evaluations and rent indices should consider important facts like the original cost of construction or purchase value of the building and the returns enjoyed by the property owner as rents and other remuneration and premiums paid over the years by the tenant for privileges granted under the same rent/lease arrangement. The current market values of rented properties should be considered as secondary to the returns enjoyed on the original investment.

 

14 Tightening of non use of commercial rented properties by tenants

Rented commercial properties are very often situated in village cores and other prime locations. A tenant who chooses to pay the rent regularly but does not operate his enterprise is thus hindering other enterprises form establishing their enterprise in those premises.

Recommendation 19: Recent court judgements evicting tenants form rented commercial properties due to non-use should be confirmed by legislation in the case of enterprises which have not been in operation capriciously for a minimum period of two (2) years.

 

15 A lower tax bracket on income derived from rented commercial properties that fall within the reforms

Recommendation 20: The GRTU in spite of the reforms imposed by the safeguards herein proposed in order to encourage the rental of commercial properties market is proposing the introduction of a fiscal incentive for property owners whereby a final withholding tax of 5% is levied on income derived form rent from commercial properties which fall within the reforms.

 

16 Alternative dispute resolution

Recommendation 21: The GRTU also firmly believes that any disputes arising in relation to rent commercial properties further to the reforms should be resolved in as short a time span as possible in order to avoid the warping of the market and enterprise due to such lengthy passage of time. Thus reference to any special Rent Boards should be avoided and disputes referred to Arbitration for expedient and inexpensive awards to be delivered.

 

GRTU Executive Council is presenting these proposals as a preamble. GRTU will be presenting more detailed proposals to the Panel of Experts/ Independent Commission should Government accept GRTU's presentation to postpone the proposed reform of commercial property rents. GRTU strongly urges Government to accept GRTU's recommendation to postpone a final decision on the Reform of rent laws effecting Commercial Properties rented to enterprise to a future date after the whole issue has been better researched and recommendations made by the Panel of Experts/ Independent Commission as recommended by GRTU.

GRTU expects that the recommendations of the Independent Commission would be more representative of the multiplicity of contracts that have evolved throughout the years than the limited package of recommendations included in the White Paper- Rental Laws: Need for Reform.

GRTU expects that the security of tenure and safeguards for enterprises in rented properties that have been the basis of enterprise support throughout the years will be improved upon and updated to meet current and future needs of enterprise and entrepreneurship within the framework of an evolving free enterprise economy.