Secret subsidy for polluting company


By Peter Boyle

MELBOURNE — Like others who were in the city on August 20-22, 1991, I vividly remember the huge black smoke plume that rose from the Coode Island chemical storage facility, immediately to the west of the city, and arched towards the south-eastern suburbs. I remember the radio bulletins warning it might be wise to stay indoors.

Nearly two years later, it emerges that Terminals Ltd — whose tanks of toxic chemicals had exploded — was rewarded with a secret multimillion-dollar subsidy by the former Kirner Labor government even while it faced several charges under the environmental protection and industrial safety laws.

The secret deal is outlined in four documents leaked to the Hazardous Materials Action Group:

  • a ministerial memorandum outlining the financial assistance package to Terminals Ltd;

  • a seven-page agreement between the former state Labor government and the company, setting out the terms and conditions of the package;

  • a schedule showing plans for upgrading the Coode facility at public expense;

  • a file note showing the calculations for assistance payments to the company.

Paul Adams of HAZMAG told Green Left Weekly that the secret subsidy allowed Terminals Ltd to obtain a monopoly over the supply of chemical feedstocks for the $6 billion Victorian chemical industry. The government agreed to pay the interest (up to $300,000 per year for 12 years) on a loan taken by Terminals in order to buy the former Powell Duffryn site on Coode Island.

In addition, the Kirner government agreed to pay Terminals a further $150,000 a quarter for the period between the impending transfer of the chemical

facility from Coode Island to Point Wilson (near Geelong) and the expiry of Terminal's lease on Coode Island in 2004.

By contrast, the maximum penalty that Terminals could face, if finally convicted of the four air-pollution and five environmental hazard charges it is facing in the courts, totals a mere $280,000 — a fraction of the secret subsidy it has already received. (These charges were all that were laid against Terminals even though investigations after the fire revealed 400 breaches of regulations. Powell Duffryn was fined $70,000 last year.)

Adams said that the Labor government deliberately covered up the deal with Terminals, and the current Kennett Liberal government kept it hidden. "The Liberal government continues to honour this financial arrangement, despite its enthusiasm to raise government charges and cut social services", he said.

The Coode Island explosion involved a deadly cocktail of toxic chemicals, including large quantities of acrylonitrile (which acts like cyanide on the human body) and benzene. Coode Island stores up to 190,000 cubic metres of chemicals. Residential suburbs begin a mere 150 metres away from the site.

If you like our work, become a supporter

Green Left is a vital social-change project and aims to make all content available online, without paywalls. With no corporate sponsors or advertising, we rely on support and donations from readers like you.

For just $5 per month get the Green Left digital edition in your inbox each week. For $10 per month get the above and the print edition delivered to your door. You can also add a donation to your support by choosing the solidarity option of $20 per month.

Freecall now on 1800 634 206 or follow the support link below to make a secure supporter payment or donation online.