The directors of a company which manufactures products entering the food chain were shattered to discover they were storing allegedly hazardous material derived from those parts of cattle believed most likely to carry the risk of the BSE virus, the High Court was told yesterday.
Irish Edible Oils Ltd, which has a tank farm at Drogheda port, Co Louth, has brought an action for alleged outstanding storage fees against Monery By-Products Ltd, with registered offices at Thomas Street, Dublin.
Mr John Gordon SC, for Irish Edible Oils, said his client traditionally stored products for use in the food-processing industry, both for human and animal consumption.
In May 1997, agents for Monery asked the company to store "green tallow" - the lowest grade - which is traditionally derived from the gut of animals and is refined for animal feed and soap.
In September 1998, the Department of Agriculture took over responsibility for 2,500 tons which was then stored in the tanks on behalf of Monery.
By the time the dispute over storage fees began, a further 2,900 tons was stored to Monery's account. By 2000, there was more than 5,000 tons, representing 95 per cent of Irish Edible Oils' capacity. The relationship was shattered as far as it was concerned when it discovered in February 1999 it was storing tallow from the renderings of specified risk material, Mr Gordon said.
As part of efforts to eradicate the BSE threat in the national herd, very stringent rules and regulations had been in place since the late 1980s, he said, involving the destruction of any animal which had the disease and the destruction of the herd in which it was moving. The measures also involved sending the brains and spinal cords of all animals which went through any slaughterhouse in the State to one facility - Monery By-Products.
These were the parts of the animals regarded as most likely to be at risk of carrying the BSE virus.
Mr Gordon said his client found it had specified risk material renderings and was alarmed, given that its business primarily involved the manufacture of products going into the food chain. It regarded this as hazardous material and, if it had known that, it would not have gone into the company's tanks.
Confrontation loomed between it, the Department and Monery and resulted in another set of High Court proceedings which were awaiting a trial date, Mr Gordon said. In that action it was claiming misrepresentation and breach of contract. Irish Edible Oils' tanks were effectively useless, he said. In the meantime, it had sought an increase in storage fees from £1 to £2.50 a ton a week from March 2000.
Monery had greeted this increase with immediate hostility. The company regarded it as too high and said it would remove the tallow before the new fees became effective. The State had also expressed dissatisfaction but paid the new rate until January this year and the State's product remained in the tanks. Irish Edible Oils was sorry it ever got into this and wanted the product removed in an orderly manner and in strict compliance with the law, Mr Gordon said.
The frustration between the parties boiled over into another court hearing in July 2001 when the court directed that the product was to be delivered by Irish Edible Oils in liquid form as required by Monery. The tallow was taken away by road tanker.
Mr Gordon said that in February this year, the staff at the tank farm had downed tools. The dispute was resolved in May this year, when all the material that could be removed was taken away.
About 136 tons of solid material remained, with no agreement as to how to get it out.
Mr Gordon said Monery maintained it should not have to pay Irish Edible Oils beyond June 2000 because it was that company's fault that the product could not be removed. It also maintained it should not have to pay a rate of £2.50 a ton.
There appeared to be differing views as to whether the material was hazardous. At European level it was regarded as hazardous but at Department of Agriculture level it was not.
The hearing continues today.