€2bn subsidy for Tata Steel hangs in balance after prosecution

The government will decide in September on the fate of a €2 billion investment package for Tata Steel while the industrial giant faces criminal charges for causing pollution.

The public prosecution service (OM) said on Wednesday it was taking the IJmuiden-based manufacturing firm to court after a four-year investigation into leaks from its production plants.

Prosecutors accuse the company of knowingly releasing gases from the production of coke into the atmosphere and endangering public health.

The case has raised questions about the government’s decision to allocate €2 billion of public money to help make Tata Steel’s processes cleaner and more sustainable.

The subsidy, announced in February last year by the previous government, would account for between half and one-third of the total cost of the renovation.

A blast furnace and a coking plant are due to be replaced by more modern facilities to reduce carbon dioxide emissions and meet environmental standards. Tata Steel is responsible for 12 megatons of CO2 emissions per year, 7.6% of the Netherlands’ total output.

Serious concerns

But the joint letter of intent included a clause that would allow the cabinet to pull out of the agreement if the criminal investigation raised “serious concerns” for the Dutch state.

The government has set a deadline of September 30 to finalise details of the support package. The ministers for climate and infrastructure, Stientje van Veldhoven and Vincent Karremans, said they would consider the implications of the criminal prosecution and report to parliament in September.

“Until then the cabinet will not take any irrevocable steps in the tailored support package,” they said in a letter to parliament on Wednesday.

The OM also said it was looking into whether individual managers could be held personally liable for the pollution or the company’s failure to obtain the correct licences and report incidents. The first court hearing is scheduled for November in Amsterdam.

“Unjust” charges

Tata Steel has called the allegations “essentially unjust” and insisted there have only been a handful of incidents of pollution at the plant.

The investigation was triggered by a formal complaint by lawyer Bénédicte Ficq on behalf of 800 local residents who complained of finding black dust in playgrounds and being affected by polluted water.

Ficq told the NRC newspaper she was “very pleased” at the decision to prosecute the company. “I am very pleased that the victims have been recognised and that the prosecution department has been able to value the interests of residents.

“It should be clear that institutional indifference to pollution has far-reaching consequences. Companies should not be able to occupy this space at the expense of public health.”

The company has already had to pay a €150,000 fine for violations of its environmental permit. In a separate investigation, Tata paid €8.5 million in fines for breaking environmental norms by emitting carcinogenic particles from two coke plants.