14 July 2008

State sold Haulbowline steel plant on the basis it was not polluted

The Irish Times 14/7/08

In 1995 the FG-Labour coalition gave buyer Ispat an assurance that the site complied with environmental laws, writes Frank McDonald, Environment Editor

THE FINE Gael-Labour government of 1995 gave the buyers of Irish Steel an undertaking that there was no pollution on site.

The Irish Steel plant on Haulbowline Island in Cork Harbour was sold by the State to Ispat in 1995 on the basis that it complied with environmental laws - even though the then government had been alerted to a build-up of dangerous wastes.

An investigation of the plant's landfill site, carried out for Irish Steel by engineers KT Cullen in 1995, found samples showing high concentrations of copper, chromium, cadmium, lead and zinc, up to 17 times acceptable levels. The investigation also found "elevated levels of metals" in harbour sediments adjacent to the landfill. Under a 1981 planning permission granted to Irish Steel, there were no controls on the material being landfilled or on containing leachate from the tip.

It is clear from documentation seen by The Irish Times that the main priority at the time Irish Steel was sold to Ispat for the nominal sum of £1 was to preserve 300 jobs at the plant for at least five years. The sale agreement, signed by then minister for finance Ruairí Quinn TD (Labour) and minister for enterprise and employment Richard Bruton TD (Fine Gael), specified that Ispat would face penalties of £10,000 per job in any year if the number of jobs fell below 300.

A clause in the agreement included a statement that, so far as the minister for finance was aware, Irish Steel "has at all times complied with the terms and conditions attaching to any environmental licences in the conduct of its business . . . the company has not produced, handled, stored, transported or otherwise treated or dealt with in any manner whatsoever on the property any substance, other than in accordance with environmental law and any applicable environmental licence".

Nevertheless, the coalition made a "capital contribution" of £2.36 million for environmental works to be carried out by Ispat, including the installation of a metal recovery plant and the construction of a retaining wall around the tip. This sea wall was never built; of the £2.3 million given to Ispat, it is estimated that only £600,000 was actually invested in environmental works.

Building the wall was one of the conditions of an integrated pollution control (IPC) licence in 2001.

Although Irish Ispat was known to be polluting the environment, it was not one of the industries to be scheduled for IPC licensing by the Environmental Protection Agency as a priority. It was not until 1999 - three years after taking over - that the company had to seek a licence.

Apart from requiring the construction of this retaining wall around the landfill, the licence specified reduced emissions of dust, dioxins and furans from the furnace, as well as "fugitive emissions" from slag handling on site.

It laid down that metal sludge then being deposited on the landfill would have to be "sent off site and disposed/recovered by an agreed hazardous waste contractor". This also applied to other hazardous wastes arising on site.

Irish Ispat decided to close down before the licence was issued, owing creditors €36.9 million. It was owned by Indian steel tycoon Lakshmi Mittal, who according to the Sunday Times Rich List, is worth £27.7 billion (€34.7 billion). The High Court found in July 2004 that the conditions attached to the IPC licence, granted in June 2001, were "onerous", particularly the requirement to build the sea wall at an estimated cost of £25 million.

The court case arose from an action by government ministers seeking to make Irish Ispat (then in voluntary liquidation) responsible for a clean-up. The State side issued a summons against the firm and Ispat International on May 21st, 2003, claiming damages for nuisance, negligence, breach of statutory duty, breach of contract and allowing escape of "deleterious matter".

Geraldine Tallon, now secretary general of the Department of the Environment, said in an affidavit there was "serious environmental pollution at the site in Haulbowline as a result of holding, recovering or disposing of waste by the respondents [Irish Ispat]".

The State was seeking to require Ispat to dispose of radioactive scrap and sources, demolish contaminated buildings, rectify the site's polluted drainage system and remediate the landfill site, including the removal of PCB (polychlorinated biphenyl) "hot spots".

But liquidator Ray Jackson argued that steel-making had been carried on for more than 60 years and it would be unfair if creditors had to bear the clean-up cost.

Judge Mella Carroll ruled that, because the licence was granted after Ispat had ceased production, its conditions could not be applied retrospectively. She also found the pollution was a legacy of 60 years of steel-making.

In 2005, after ownership reverted to the State, the Department of the Environment commissioned consultants White Young Green to investigate the site. They concluded that there was no "immediate threat" to human health or the environment. The same consultants have been engaged by John Gormley to carry out an "independent and rigorous assessment of site conditions following extensive unauthorised works by sub-contractors of Hammond Lane Metal Company Ltd".

This assessment, which started last week, will involve analysis of soil, slag, dust, surface and ground water samples. It is known that carcinogenic chromium 6 is present.

The site will have to be remediated. No one can say how much this will cost, but it is clear taxpayers will have to pay.


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