Dáil Éireann debate -
Tuesday, 27 May 2003

Vol. 567 No. 5

Waste Disposal.

Mr. Coveney

This issue is serious and I am glad to have the opportunity to raise it, having had it on the waiting list for Adjournment debates for some time. I hope that the Minister of State will take it as seriously as I do. I will not waste time by outlining the detailed history of the Irish ISPAT steel site, formerly Irish Steel, on Haulbowline Island in the centre of Cork harbour. The Minister will know that in 1996, in an effort to save the plant and jobs, Irish Steel was sold to Irish ISPAT, part of a huge multinational steel company, for IR£1. Now the plant has closed, the big question is who will take responsibility for the clean-up of the site and what environmental damage might be caused by what lies on it. The horrifying legacy of environmental pollution revealed by the Environmental Protection Agency's investigation in preparing to issue an integrated pollution control licence to Irish ISPAT is startling. A 2001 EPA report states:

The site investigation in 1995 involved trial pitting and the installation of bore holes distributed throughout the landfill. Trial pits of 4 metres depth indicated completely heterogeneous material, including silver slag material, brown gravel material containing metal and brick fragments, plastic bags and so on. Soil samples from the trial pits were analysed. These show high concentrates of copper, chromium, cadmium, lead and zinc.

In June 2001, the EPA imposed very significant obligations on the new owners, and rightly so, owing to environmental fears. I believe that the potential cost involved in fulfilling the EPA's requirements was one of the factors that contributed to Irish ISPAT's decision to close operations. Serious quantities of material have been dumped in the centre of Cork harbour adjacent to Haulbowline Island and Rocky Island. It was thought, and is still thought by some, that constructing a wall surrounding the landfill section of the island in an attempt to encase what may be contained in that dumping area will suffice. Since liquidation, a receiver has been put in place and has been selling off bits and pieces of the site and obviously giving the money received to ISPAT. In recent weeks part of the overall ISPAT site was sold for €800,000 to Cork Harbour Commissioners.

I want the Minister to tell me who will take responsibility for the site when Irish ISPAT leaves this country in the next few weeks. When it does so, I fear that we will have no power to demand of it what we should be demanding, namely, a very significant contribution towards the clean-up of that site – in an area in the middle of Ireland's largest natural harbour perhaps as environmentally sensitive as anywhere else in the country – to make it environmentally safe. There are serious question marks as to whether it will suffice to surround the landfill with a wall because of leaching over time, and environmentalists question that as a solution.

A company in liquidation is about to leave the country, selling off assets and apparently planning no significant contribution towards the clean-up operation. We will be left with part of an island with a landfill site where a variety of metal wastes and perhaps toxic chemicals have been dumped with the potential of leaching into Cork harbour. To give an idea of the cost we may be talking about, cleaning up the Dublin gas site cost between €19 million and €20 million.

I ask the Minister if it is possible for the Government to freeze the remaining assets of Irish ISPAT until we have secured a significant contribution towards the clean-up operations on that site. Does the Minister possess a detailed environmental assessment of the site so that we can put to rest people's fears about what is there and how the State will deal with it? Regardless of whether we like it and how expensive it proves, the site must be cleaned up for the sake of people living in the Cork harbour area and so that we can progress and develop that site for the benefit of Cork harbour in future.

Minister of State at the Department of the Environment and Local Government (Mr. Gallagher)

I will begin by thanking Deputy Coveney for raising this matter in the House and for providing an opportunity to outline the up-to-date position on matters connected with Irish ISPAT. While Deputy Coveney takes this matter very seriously, it is not necessary for me to state that the Department and I take it equally as seriously.

At the outset, it might be useful if I set out the background to this case. In 1996, the State sold Irish Steel Limited to ISPAT Mexicana for the nominal consideration of £1. As part of the sale agreement, the company received payments and loan write-offs to the value of approximately €47 million. These reflected the fact that Irish Steel Limited was carrying significant liabilities and had a considerable negative net value. As part of the sale agreements, ISPAT Mexicana gave a number of commitments, including an undertaking that a payment of £2.36 million made to the company would be spent on environmental works. In a subsequent reorganisation of the ISPAT Group, ISPAT International became Irish ISPAT's parent company, in place of ISPAT Mexicana. Most of the commitments entered into under the sale of Irish Steel had been met by the time Irish ISPAT Limited ceased trading and went into liquidation in June 2001. However, there remains some outstanding issues to be determined, particularly in relation to the expenditure on environmental works.

Among the assets of Irish ISPAT Limited were the land and buildings on Haulbowline and elsewhere from which the company operated. Some of these lands were held on a freehold basis while others were leased. The Haulbowline lands, on which the company's main production facility was located, were leased from the Departments of Finance and Communications, Marine and Natural Resources. The lease contained standard type clauses requiring that, on its termination, the lands should be reinstated. It should be noted that an expert report commissioned by the Department of Communications, Marine and Natural Resources indicates that the cost of full site remediation could be in the region of €30 million.

The liquidator has applied to the High Court seeking an order allowing him to disclaim the lease under section 290 of the Companies Act 1963 on the basis that it is onerous. In addition, in accordance with a break clause in the lease, he is seeking to surrender the lease itself. The State is resisting these actions. Separately, proceedings have also been initiated under the Waste Management Act 1996.

An interim injunction was granted to the State on 19 May 2003, restraining the liquidator from vacating the leased land. Yesterday, an interlocutory injunction was granted by agreement between the parties, pending the liquidator's removal of radioactive materials from the lease hold site. This injunction will remain in place until 18 June at which point the liquidator will update the court on progress.

As Irish ISPAT Limited is in liquidation, it is now a matter for the liquidator to realise the assets of the company and to apply the funds realised to discharge the legal liabilities of the company to the extent possible in line with the normal requirements of insolvency law. The State will be seeking to maximise any possible recoveries from the liquidation or otherwise in respect of the costs of whatever environmental clean-up of the site is required. The various legal actions to which I have referred are consistent with this objective. Given the liquidator's role and responsibilities in this matter, legal advice received indicates that it would not be necessary or appropriate to seek to freeze the assets of the company.

In responding to this item, I have endeavoured to provide as much information as possible for Deputy Coveney while respecting the fact that matters connected with this case are the subject of various legal proceedings.

The Dáil adjourned at 9.05 p.m. until 10.30 a.m. on Wednesday, 28 May 2003.