Tunnelling the environment

by Andreas Beckmann

Porous laws and lax controls have made "tunnelling" businesses a favourite path to riches for many Czech entrepreneurs. By manipulating complex operations between networks of real and unreal firms, astute businessmen transfer a company's assets into their own pockets — more or less legally. The case of the toxic waste dump at Milovice suggests that this ingenious technique may be applied to the environment as well.

At the beginning of the 1990s, Proeko, a private firm specialising in toxic waste disposal, gained permission to use an abandoned Soviet army base at Milovice, east of Prague, for its mobile toxic waste incinerator. The firm amassed almost 2,000 tonnes of highly dangerous substances at the site, but failed to gain permission for full operation of the incinerator. In 1994, Proeko transformed itself into another company and promptly declared bankruptcy.

Left behind was one of the country's worst toxic nightmares. Leaking, rusty barrels included oils with cyanide, an estimated 5,800 kilograms of toxic PCBs and some 40 grams of highly dangerous dioxins — enough to contaminate the country's entire agricultural sector.

Czech Greenpeace found that Proeko had offered its clients far lower prices for liquidating toxic waste than their competitors. "It could have been a very profitable business," says Miroslav Suta, head of Greenpeace's toxics campaign in the Czech Republic. "Firms that needed to get rid of toxic substances paid Proeko for their liquidation. In return, they received confirmation that the waste had been given to a firm that was officially certified for this activity." Proeko had in fact received permission to operate its incinerator, but only for testing.

With the cost of liquidating toxic waste running into the tens or even hundreds of thousands of Czech crowns per tonne, handling the nearly 2,000 tonnes at the site could have yielded a windfall of hundreds of millions of crowns (millions of USD). "I have serious doubts whether this ever was a serious business proposition," says Suta. "There is a question whether this was not a case in which the environment was tunnelled by previous agreement."

The highly toxic barrels leaked and rusted for several years as responsibility for the problem was thrown like a hot potato between various ministries and the district government. Finally, in 1998, Greenpeace drew media attention to the site, eventually forcing the various authorities to find a compromise.

But the chapter on Milovice has not closed. One of the firms hired to dispose of the toxic barrels from Milovice refused to give information regarding what it is doing with the waste. The secrecy naturally raised Greenpeace's suspicions.

"We could have just followed the trucks and seen where the stuff is being hauled," says Suta. "But we want to follow the issue through official channels in order to achieve systemic changes in the way such issues are treated."

The district authorities that now bear responsibility for the site declare themselves uninterested in what happens with the waste, a position that Suta calls scandalous, particularly given the dangerous materials involved. Greenpeace has asked the Czech Environmental Inspectorate to look into the matter and is pushing the state administration to address a series of systemic failures in the way toxic waste is handled in the Czech Republic.

A basic problem is lack of clear responsibility. Given the complicated process of restitution and privatisation, figuring out who owns an abandoned parcel is difficult enough. But who should bear the burden of clean-up costs that can easily run into the millions of crowns? There is currently no established process for forcing offenders to pay for damages incurred. In fact, firms handling dangerous substances currently carry only limited liability of up to 100,000 crowns (roughly USD 2,500), a pittance compared with the potential damage that can result from their actions. There is presently no insurance scheme to cover clean-ups like Milovice.

New legislation on access to information requires public officials to provide information they already have; but nothing requires bureaucrats to inquire about how toxic substances are being handled. In fact, although public officials should safeguard the long-term interest of society — ensuring, for example, that toxic waste is disposed of safely — there is nothing that forces them to do so.

Says Ondrej Velek of the Environmental Partnership for Central Europe: "We really need effective legislation on long-term liability that can prevent tunnelling of the environment and our children's futures."