The High Court has dismissed an attempt by the State to have the liquidator of Irish Ispat (formerly Irish Steel) meet the estimated €30 million costs of making environmentally safe the company's former site at Haulbowline Island, Co Cork. Mary Carolan reports.
Ms Justice Carroll yesterday granted an application by the liquidator, Mr Ray Jackson, to be allowed to disclaim an Environmental Protection Agency licence requiring certain environmental safety conditions to be observed at the company's site.
The cost of rehabilitating the site, where hazardous waste and radioactive scrap materials had been identified, had been estimated at €30 million in a report which was commissioned by the State.
In an affidavit, one of the authors had said that unless the recommendations of the report were implemented, there was a serious risk that environmental pollution would occur in the future.
The EPA also attributed some €15.9 million of the rehabilitation costs to the company.
Mr Jackson had argued that it would be unfair to the creditors if they were to suffer the burden of the cost of undertaking this work. It was not his lawful function to apply the realised assets of the company for that purpose, he said.
In related proceedings brought by the State against Irish Ispat and Mr Jackson, the State sought orders under the Waste Management Act 1996 requiring the respondents to discontinue the holding, recovery or disposal of waste on the lands at Haulbowline within a specified time and to carry out certain rehabilitative works within a specified time.
The State also sought orders requiring the putting in place of an effective and ongoing monitoring, examination and inspection system for the site to prevent future occurrence of environmental pollution.
Both sets of proceedings were heard by Ms Justice Carroll who, in a reserved judgment yesterday, granted the liquidator's application and dismissed the State's proceedings. She adjourned her decision on costs to October.
Irish Ispat Ltd was formerly the State-owned Irish Steel. The State had operated the premises from 1937 to 1996 when the premises were leased to a new owner, Ispat Mexicane, the parent company of Irish Ispat. The State resumed possession in June 2003 after the liquidator operated a break clause in a lease.
The EPA licence was applied for in April 1999 and was granted on June 22nd, 2001, to Irish Ispat. Six days later a resolution supporting the appointment of Mr Jackson as liquidator was passed by members and creditors of the company.
All the radioactive waste on the lands at Haulbowline has been moved to Rocky Island, the court was told last year.
Yesterday, granting the liquidator's application, the judge said the EPA licence was granted after the company had ceased production of steel. Before the licence was granted, the production of steel had been permitted under the EPA Act 1992 and was not subject to any conditions. The conditions in the licence could not be applied retrospectively.
The judge said the liquidator had finished off work in process, but this was an associated part of the smelting and production of steel which took place before the granting of the licence, which was not subject to any conditions.
It was also a factor that the amount of waste attributable to the work undertaken by the liquidator "must be infinitesimal in relation to the general pollution caused over the 50-60-year period when the company was owned by the State up to 1996 after which it was taken over by a foreign shareholder".
The judge said the "polluter-pays" principle set out under an EU directive could not be achieved in this case. The obligations under the directive referred to ensuring the installations "are operated" in a particular way and did not refer to past operations.
The licence was granted after the company had ceased to carry on business so the company never did what was authorised by the licence. The company had no assets and those which were available for distribution were impressed with the trust for the creditors.
For those reasons, she would not direct that the liquidator expend money, which was available for distribution among the creditors, in mitigating or remedying pollution on Haulbowline.
She added that it was "not clear to me why the EPA had issued the licence in circumstances where it would never be operated".