Iceland’s National Audit Office has strongly criticized the actions – or lack of actions – of various government bodies during the period leading up to the start-up of the silicon metal plant run by United Silicon which was eventually closed by the Environment Agency on September 1 last year.
The report (in Icelandic) was submitted to the parliamentary Althing at the end of last week, as it was Vidreisn MP Hanna Katrin Fridriksson who had requested the investigation. Many points came up in the report, some of which were foreseeable and known while others were not.
The Audit Office say that the issuing of concession agreements should be refined in future. They say that those responsible for issuing operating licences (i.e. the Environment Agency) and concession agreements (the Government) must ensure beforehand that the operators of polluting industries can verify their ability to manage such operations and the truth value of the information presented.
They say that the environmental impact assessment (EIA) included air pollution dispersion forecasts that were purported to come from a Danish engineering consultancy, COWI – but, just before the EIA was presented, COWI said they had nothing to do with the making of the model and wanted their name removed. The EIA also did not mention odour pollution and the reasons for it were never explained fully, apart from irregular operation of the arc furnace. They say the the Planning Agency must think about how to react in cases of conceivable deviations from the EIA, especially when a plant is in close proximity to a residential area (as was the case both with United Silicon and the PCC plant in North Iceland that has just started operating).
According to the report, the plant was not fully completed when operations started and the compulsory pre-startup visit by the Occupational Safety and Health Authority did not take place until after operations had started. The plant’s buildings were not in accordance with existing planning regulations, visual pollution was greater than expected (probably due to two buildings being higher than planned) and the plant was not operated in accordance with the EIA, the operating licence or the aims of the concession agreement.
The capital requirements were also underestimated. When the concession agreement and profitability analysis were being prepared, all available data and information came from the company itself, and the information on the owners and administrators was unclear.
The newspaper Fréttablaðið covered the report in some detail and also dug up the following: If the owners had been investigated beforehand, it would have come to light that one of the owners, Magnus Gardarsson – who was fined for speeding last year and also charged with embezzlement and forgery – had been made to resign from COWI for misusing his position as an employee there, and also that a company owned by him had been fined for violating the rights of employees.