Annual Report 1999 - Kemira

ENVIRONMENTAL INVESTMENTS
AND OPERATING COSTS
The Group’s capital expenditures on
environmental projects declined by
about 16%, to EUR 13 million (Figure
10) or about 7.5% of all investments.
Environmental operating costs rose
by approximately 8% to an all-time
high of EUR 53 million. The increase
was the most pronounced in the titanium
dioxide and fertilizer businesses.
Environmental costs totaled EUR 65
million, with practically no change
from the previous year. These costs
correspond to 2.6% of Group net sales,
on a par with the previous year. As the
announced change in the Group’s
business portfolio will progress, these
costs are expected to decrease further.
ENVIRONMENTAL RISKS,
LIABILITIES AND LEGAL ISSUES
Compliance and permits. Overall compliance
with site-level permit conditions
was satisfactory in 1999. A noncompliance
situation was observed at
four sites. The authorities have been
informed and corrective action has
been taken.
Kemira Pigments Inc., Savannah,
received two final Consent orders regarding
environmental issues as well
as two proposals for such orders by
Georgia Environmental Protection Division.
One of the proposed orders,
regarding a failed calciner stack test,
was finalized in January, 2000.
New environmental permits or renewals
of existing ones were again issued
to many of the reporting sites, often
spelling out tighter limits for specific
releases.
The waste management permits issued
to the Pori and Siilinjärvi plants
in Finland contained significant requirements
concerning future measures
in the piling and rehabilitation of
by-products and waste at the two sites.
However, there were no conditions
causing significant immediate action,
and the Siilinjärvi permit is subject to
an appeal in the Highest Administrative
Court. The outcome of these cases
cannot yet be fully predicted. At
Kemira Agro Pernis, the plant closure
has stopped all permit procedures,
which were expected to have adverse
effects on that particular business.
No significant difficulties were encountered
in obtaining the necessary
environmental permits to expand or to
continue industrial operations.
Accidents, occasional releases and
environmental impacts. The number of
industrial accidents and environmental
incidents reported by the sites increased
from the previous year. The
following cases caused local environmental
impacts or concern:
– February: A broken loading line in
the harbour of the Kemira Agro
Uusikaupunki plant in Finland
caused leakage of 5 tonnes of phophorus
in the form of acid. This may
increase eutrophication of the sea
water close to the plant.
– April: A fire broke out in the fertilizer
storage building of Kemira Agro
Rozenburg, the Netherlands, causing
property damage, heavy smoke formation
and a spill of about 7 tonnes
of calcium ammonium nitrate compounds
into the river.
– September: Approximately 6 tonnes
of fuel oil was found to have leaked
into the river from a storage tank of
the granulation plant at Kemira Agro
Pernis, the Netherlands.
– September: 400 tonnes of urea ammonium
nitrate leaked from a storage
tank at Kemira Agro Rozenburg.
– November: A fire on the roof of the
Kemira Pigments Pori plant in Finland
caused property damage and
smoke formation.
Other reported spills and accidents
did not cause significant environmental
impacts outside the plant areas. All
accidents were investigated in detail
and reported to the authorities, and
appropriate insurance procedures have
been undertaken.
Kemira Pigments Inc. had eight reportable
releases of chlorine, caustic
and sulphuric acid in Savannah, Georgia.
The Group companies paid approximately
EUR 0.2 million in compensation
for environment-related
damage, or in penalties.
Lost-time incidents showed a good
trend, decreasing by about 22% from
the previous year. However, a fatal accident
occurred on 11 January 2000 at
the Kemira Agro Uusikaupunki plant
in Finland. One employee died after
falling from the roof of a fertilizer
sludge reactor during maintenance
work. The Kemira Group deeply regrets
this loss of life.
Environmental liabilities. Soil and
ground water contamination and other
risks associated with past activities
have been assessed at all major
Group-owned properties. Several complementary
investigations were reported
on.
Mergers and acquisitions or plant
closures did not change the environmental
liabilities significantly in 1999.
Detailed environmental due diligence
projects were conducted in connection
with the completed acquisitions and
with the pending divestment of the titanium
dioxide business.
At present, there is a requirement
or commitment to undertake a limited
clean-up at five sites, and appropriate
provisions have been made. Remedial
action or demolition were carried out
at six sites. The costs of current cleanup
activities are reported as environmental
operating costs (see above).
The Group also continued to build up
a reserve for unforeseen remediation
costs.
Kemira Chemicals removed soil
contaminated by mercury at the Kokkola
plants (see above), but the cost
was not significant. Investigations of
arsenic in the sediment of the small
lake close to the Vaasa plants are continuing.
Ground water clean-up was
temporarily halted at Kemira Kemi AB,
Helsingborg, Sweden, because of low
residual levels achieved. In December
elevated concentrations of hexachlorobenzene
were found in the sediment,
mussels and fish in the plants’
harbour basin. Investigations of the
sources and releases of organochlorine
compounds are going on at Helsingborg
and Kokkola.
At the Tertre plant of Kemira Agro
in Belgium, manganese nitrate was
found in waste water due to subsurface
transport from a neigbouring industrial
property.
Legal cases. There were no significant
environmental legal cases pending
against the Group companies.
Environmental taxes and fees. Environment-based
taxes totaled EUR 11.5
million calculated on a net basis, on a
par with 1998. Proposed increases in
environmental taxation are not expected
to hurt the competitive position of
the Group.
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