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Majority of MEPs support fracking moratorium in symbolic vote

MEPs in Strasbourg vote 338 to 319 in favour of moratorium on hydraulic fracturing for shale until is proven safe – but vote will have no practical effect

A majority of MEPs supported a moratorium on fracking for shale gas for the first time on Wednesday, in a symbolic vote that may nonetheless signal uncertainty ahead for the European Commission and industry.

The report containing the amendment vote was not adopted and the result will have no practical effect. But anti-shale parliamentarians say that they have put the issue back on the agenda and now plan to push for a more consequential vote on the issue.

“We have sent a clear political message to the Commission and shown that there is a majority in parliament for further steps and actions, which may now be expected,” the Green MEP, Benedek Javor, told the Guardian.

A new fracking ban text could now be introduced in another text which, if passed, would trigger formal debates at the European Commission and among heads of state, he said.

Javor was a co-sponsor of the amendment, along with the Socialist MEP, Miroslav Poche. Its outcome may cause queasiness in Brussels. Last year, the Commission largely opted out of shale gas regulation after UK lobbying, while the vaunted “shale gas revolution” in Europe is currently viewed as a “dud” by analysts.

Shale companies are expected to get a fresh €15m handout from the EU for environmental impact studies, according to documents seen by the Guardian. While that money is unlikely to affect shale prospects in Europe, regulatory uncertainty might.

Today’s amendment, which was passed by 338 votes to 319, called for a halt to the authorisation of new shale explorations and drills “until this is proven safe for the environment citizens and workers”.

Its umbrella report is thought to have fallen because Greens and far left groups joined pro-fracking conservatives in voting it down, due to another inserted amendment supporting public funds for nuclear energy.

Theresa Griffin MEP, Labour’s European spokeswoman on energy, said: “It is hugely disappointing that the Tories have, once again, aligned with Ukip to vote down a very important report on energy security, which included support for renewable energy and energy efficiency.

“Labour MEPs want to make sure the UK’s energy security is reinforced by reducing our dependency on fossil fuel imports and developing renewable technologies. We are pro-business and pro-environment and know it is crucial to boost investment in renewable energy across Europe.

Even so, Geert de Cock, the director of the environmental group Food and Water Europe, said that it showed that Europe’s political winds were turning. “We consider this vote a milestone for the European anti-fracking movement and a clear indicator that the public acceptance for this industry is crumbling across the EU,” he said.

UKOOG, the representative body for the UK onshore oil and gas industry, said: “We are confident that our industry has already been proven to be safe and, therefore, fail to see any justification for a moratorium.”

In another confusing week for MEP’s at Strasbourg, a key vote on the TTIP trade talks planned for today was cancelled, ostensibly due to a huge number of amendments that had been added to the resolution.

The Plaid Cymru MEP Jill Evans claimed that the delay was merely intended to fend off internal divisions among centre-right political groups which were coming under public pressure.

How Brussels took on Orban’s son-in-law

By June 2015, the scandals that had shaken Hungary’s governing party a few months earlier had mostly faded away. Behind the scenes, though, another story began to emerge that might cause long-term problems for the party’s highest circles.

It was becoming clear then that the European Union is seriously interested in the controversial businesses of Istvan Tiborcz, the son-in-law of Viktor Orban, Hungary’s prime minister.

In the first weeks of the summer, investigators of Olaf, the EU’s antifraud office, visited Budapest and made inquiries about the state contracts which had been awarded under suspicious circumstances to energy company Elios Innovativ, then co-owned by Tiborcz. Around the same time, another EU body also started to look into the matter.

In June, the European Commission’s Directorate General for Regional Policies launched an audit of Elios’ projects that were financed almost fully from EU funds. The audit’s goal is not only to find out what happened but also to impose sanctions for any potential abuse of EU money. The sanctions include the possibility that Hungary will lose some of the EU subsidies it is entitled to. The contracts are being investigated by the Hungarian police as well.

The EU’s interest means, however, that the case involving a member of the Orban family is being examined from different angles and by organisations that are entirely independent of the Hungarian government. While Tiborcz sold his shares in Elios Innovativ in the spring of 2015, the events being investigated by the Hungarian and European authorities occurred mostly when he was still a co-owner of the company.

Elios had won a series of state tenders in most cases without facing any competition. It was the execution of these tenders that first came under suspicion, but the investigations are also looking into how Elios carried out the projects, including the inexplicably high prices it charged for some of its products.

Olaf confirmed months ago that it was conducting an investigation. Hardly anything, though, has been discovered about the procedure so far. The European Commission’s audit has not been reported until now. Although the Hungarian government and the authorities are aware of some aspects of these investigations, they declined to give any official information. Direkt36, a Hungarian website, however, learned new details of both EU inquiries from sources familiar with them.

Brussels reads the news

In Hungary, Elios Innovativ first attracted attention back in 2011 (the company was then called E-OS Innovativ) by winning state contracts as a politically connected company. The scrutiny has intensified since 2014, when the company started to win tenders for public street lighting projects which were launched in several towns as part of a countrywide programme.

As this programme is almost entirely financed by the EU, the winning streak and the suspicion of irregularities naturally attracted Brussel’s interest as well. Olaf made the first move. The Brussels-based office, which is responsible for protecting EU financial interests, launched an investigation into the Elios projects in January 2015, according to Olaf’s press office.

Olaf has not disclosed any details about what prompted the investigation but, according to its publicly available guidelines, the procedures can be based both on reports received from outside sources and on information gathered by Olaf’s staff. The latter was the case with the Elios investigation, according to a source familiar with the procedure, but Olaf also received several external complaints about Elios and the Hungarian street-lighting projects.

In February 2015, Csaba Molnar, a Hungarian member of the European Parliament from the opposition Democratic Coalition party, sent a letter to Giovanni Kessler, Olaf’s director general. In it he described how Elios had multiplied its revenues in only a few years, just as it was being awarded valuable state contracts, mostly for projects funded by the European Union. Molnar argued that the company’s rise is in itself suspicious, given that “it’s co-owned by the prime minister’s son-in-law.”

Olaf was also following Hungarian press reports, including stories from Direkt36, that pointed to potential wrongdoing. The investigators therefore knew of the suspected conflict of interest surrounding some of the procurements awarded to Elios.

As Atlatszo, a watchdog NGO and online newspaper for investigative journalism in Hungary, reported, in several cases the public procurement announcements were prepared by a company whose co-owner also had shares in Elios. Olaf was also aware of the Direkt36 story, which revealed that so many contracts could be awarded to Elios without any competition because the tenders contained such specific requirements that no other company was able to meet them.

In the meantime, Olaf received another report from Hungary. In April, Andras Lukacs, president of the Clean Air Action Group, a Hungarian activist organisation, sent a letter to the European Commission. The letter argued that, based on some economic analyses, the EU’s funding system helps erode Hungary’s democracy because a big chunk of this money ends up in the hands of businessmen close to whoever is in government. This distorts the market significantly, Lukacs argued. Lukacs’s letter listed several examples, including the spectacular rise of Tiborcz’s company and its share in state contracts.

A few weeks later, he got a response from an official of the European Commission who told him that “concerning the possible misuse of EU funds, your email has been forwarded to the European Anti-Fraud Office (Olaf), which is responsible for conducting investigations in the field of the protection of the EU financial interests.”

Well-prepared investigators

At this point it was still not publicly known that Olaf was investigating Elios’ contracts. The office’s investigators, however, had quietly made some progress. In June, they visited Hungary and met an opposition politician who had turned to Olaf with other matters in the past.

This meeting was not dedicated specifically to the Elios investigation, but that was discussed as well. According to the politician, who asked not to be named, Olaf officials appeared to be “very well-appraised of the details of the Elios case.” They had already got in contact with the Hungarian authorities investigating the street-lighting projects and had access to their files, the politician said.

This Hungarian investigation was prompted by a report filed by Andras Schiffer, co-president of LMP, an opposition party, based on Atlatszo’s article detailing the suspected conflict of interest.

Who took on the mafia

The politician who met the Olaf officials noted that based on the investigators’ remarks he had the impression that Olaf “has limited capacities to deal with the high number of Hungarian cases.” Still, Olaf’s head has made it clear to the public that he is paying special attention to Hungary.

On 22 June, Giovanni Kessler, Olaf’s director general, travelled to Budapest to discuss investigations in person with Peter Polt, Hungary’s prosecutor general. Polt received Kessler, a former prosecutor himself, in the headquarters of the Prosecutor’s Office. Kessler served for more than 10 years as a prosecutor in his homeland, Italy. He spent a third of this time fighting the mafia, proving he is not afraid of taking on powerful interests.

In the mid-90s he asked to be placed in Sicily, on the frontline of the anti-mafia fight. This was considered a highly dangerous commitment at the time. The mafia had assassinated several prosecutors in previous years. Kessler was aware of the risks, and according to a local press report, guards protected him at a press conference where he announced the indictment of mafia figures.

Almost no details have been disclosed officially about what Kessler and the Hungarian prosecutor general discussed at their meeting. Olaf and Polt’s office declined to say what cases were on the agenda and offered only vague and slightly contradictory statements about the meeting.

“The parties exchanged information on the status of pending cases and discussed required measures and information flows in certain matters,” said the Prosecutor General’s office in a statement published on the day of the meeting.

Special attention

Whatever was discussed, Kessler made it clear that his visit to Budapest carried a special meaning. A few weeks later he gave an account of Olaf’s work in front of a European Parliament committee, saying it does not often happen that he delivers reports of individual cases to the head of a national authority in a member state.

“Normally we don’t [do this]. If I have to deliver it personally, taking a flight, going in the morning to Budapest and coming back in the afternoon, as I did [in this case], I couldn’t even work in my office,” said Kessler. He added that he made an exception because of the importance of the cases and also because Hungary is one of the countries with the highest number of Olaf investigations.

According to Olaf’s most recent report, in 2014 they concluded 13 investigations in Hungary. There was only one country with a higher number: Romania, where 36 cases were closed. Olaf’s investigation into Elios’ projects is remarkable because it is being conducted in parallel with an investigation carried out by the Hungarian authorities.

“In this case, Olaf’s role could be not to allow the Hungarian prosecutors to sweep it under the carpet,” said Benedek Javor, an MEP from the opposition party Dialogue for Hungary, who also filed a report about Elios with Olaf. That report was based largely on a Direkt36 story that showed that Elios charged inexplicably high prices for some products in the street lighting projects.

Another Hungarian official based in Brussels, who also has links to the Hungarian opposition, said that an Olaf official told him in September that the Elios-investigation is considered a “a case of high importance ” inside the anti-fraud office. The source asked not to be named because his conversation with the Olaf official was confidential.

Even though Olaf has relatively wide authority to conduct investigations – including the right to carry out on-the-spot checks – it has limited power when it comes to holding responsible those who are suspected of wrongdoings. The only thing Olaf can do is to pass proposals to other authorities.

They can submit financial recommendations to EU institutions that seek the recovery of misused EU money. They can also turn to the national authorities with judicial recommendations, suggesting them to take judicial actions. However, it is entirely up to the national authorities whether they Olaf’s advice.

Another investigation

One EU procedure in progress could have more immediate consequences. In June 2015, the European Commission’s Directorate General for Regional Policy launched an audit into the procurements awarded to Elios Innovativ, Direkt36 learned from a Commission source acquainted with the audit.

The Commission has notified the Hungarian authorities, namely the National Development Ministry, which is in charge of the street lighting projects, of the audit. The government declined to answer questions on the procedure, saying that EU regulations prevent them from disclosing information about ongoing audits.

According to the Commission source, the audit is still in a so-called contradictory phase. This means that the Commission discusses the matter with the national authorities before coming to a final conclusion. The payments for the projects under investigation, however, have already stopped. The Commission source says that this halt was not initiated by Brussels but by the Hungarian authorities, which have not submitted any payment claims to the Commission for them.

The Hungarian government declined to answer any questions regarding this decision. The Commission also asked the Hungarian authorities to take “certain corrective actions.” The nature of these actions has not been disclosed by the Commission sources, but in the terminology of the Commission audits, “corrective actions” mean financial penalties.

When a corrective action is taken, a part of the EU funds allocated for the impacted program is taken back by Brussels. On average, it is five percent but can be much higher.

Even a few percentages can amount to hundreds of millions or billions of forints. Through a subset of the Environment and Energy Programme, which funds the projects won by Elios, 19 billion forints (€61 million euros) were paid out for public lighting developments.

Elios won the tenders in more than two dozen cities, acquiring contracts worth 10 billion forints (€32.1 million). The company has not responded to Direkt36’s questions, including how much of this they have received so far. Hungary could lose part of the funding for some of these street lighting developments if the European Commission closes its audit by taking “corrective measures”. Even though governments often have room for manoeuvre to avoid some of the sanctions, in this case the chances for this are poor.

An EU development cycle runs for several years, and during this cycle the member states have the possibility to save some of the money affected by corrective actions. The governments can ask the European Commission’s permission to reallocate the money for other programmes instead of paying it back into the EU budget. This, however, will not be an option now because the current cycle is about to end.

“If a corrective action will be taken, then this money will be lost. If this had happened at the beginning of the development cycle, the government would have the option to move the money to other fields. Now they do not have this possibility,” said Gabriella Nagy of Transparency Hungary, adding that therefore the money “will go back into the EU budget.”

–  The story first appeared in Direkt36, the website of an independent investigative journalism center in Hungary established in 2015. Gergo Saling contributed to the investigation

Original Source: https://euobserver.com/investigations/131199

 

Lessons learnt 5 years after the Hungarian red mud disaster

The red mud case in the Hungary 5 year ago was one of the worst European environmental accidents causing 10 deaths and leaving hundreds injured and over 300 houses destroyed. It was the first „major case” where the Environmental Liability Directive 2004/35/EC (ELD) was applied. Our conference held on October 5th 2015 examined what lessons have been learnt from the accident and how European legislation and implementation could be further improved to ensure the prevention or best remediation of similar accidents.

In the opening we shortly spoke of our visit to Kolontár and Devecser with Ulrike Lunacek on 2nd of October and presented a video that you can watch here: https://youtu.be/QOT_f3fHz90

In the first session speakers described what exactly happened in Kolontár, Hungary and what the underlying reasons to the disaster were. Mr György Bakondi described the events in detail and outlined the actions taken by the relevant authorities firstly to stop the sludge reaching the natural waters and secondly to restore the damages caused by the red sludge as far as possible and thirdly to prevent further spills from the reservoir. Zoltán Ferencz researcher from the Hungarian Academy of Sciences detailed the social impacts of the crisis on the towns it affected. Furthermore, the recovery process following the disaster included several categories of damages: property damage, environmental damage, economic damage, and damages to the physical and mental health of the affected communities. Infrastructural repairs were done and financed by the Hungarian Relief Fund and contributed to new schools, health centres, and public spaces. However, more relief is still needed in the affected towns including local economic development, ongoing psychological assistance, air pollution control. Ferencz suggested that regular health screening, community development programmes and capacity building of local stakeholderswould be advisable steps to take to continue aid the towns in need. More than anything, he emphasized the necessity of clarifying responsibilities and ensuring increased transparency and communication between private donors and government relief efforts.

At the end of the first session Mr Gergely Simon held a presentation about the lack of proper risk assessment, the authorities’ failure to identify the instability of the dam and take action accordingly. Through frequent (geological) monitoring the catastrophe could have been prevented, however, the mining authority was not involved in the permitting either. Another grim fact he faced the audience with was that red mud was not classified as hazardous waste after 2002, easing requirements both for monitoring and waste disposal. Amongst additional causes of the disaster he mentioned the lack of mandatory financial security deposits, no proper information on the composition of the sludge, the site operator not fulfilling remediation obligations set in the privatisation contact and the lack of independent and strong Hungarian authorities. Had laws been interpreted and applied well or politics had been stronger and included environmental guarantees in the privatization contracts, the impact could have been not so severe. Finally, he drew the attention on other similar cases still unsolved and the consequences at a national level.

During the second session, Mr. Vito A. Buonsante gave a presentation reviewing the Environmental Liability Directive (ELD). The objective of the ELD is to establish a framework of environmental liability, to implement the polluter pays principle and to prevent and repair future environmental damage. He identified several problems with the directive, including its very limited scope (as set out in Annex III, failing to encompass fossil fuel infrastructure and many other activities covered in the Environmental Impact Assessment Directives), governance structure and vague and restrictive definitions of terms such as significant adverse effects and environmental damage. While recognizing that the ELD is positive because it creates a right to access justice for environmental issues, Buonsante also recommended that in order to improve, the scope of the ELD should be extended by phasing out exemptions and redefining environmental damage (to go beyong land, water and biodiversity aspects) and make operators of all occupational activities strictly liable for all environmental damage.

In Mr Simon’s second presentation he focused on the prevention of possible disasters in the future after Seveso III Directive was adopted in 2011. He stressed that red mud ponds are still not covered by the legistation and the objective of prevention cannot be fulfilled by the current legislation. Remaining gaps like the lack of requirement for compliance with Best Available Technologies and for elimination hazardous substances, introducing an adequate financial liability scheme, frequent and effective inspections, regular safety studies as well as transparency are to be solved.

Overall, the conference was informative and stimulating. While there was much reflection on the red mud disaster, there was also ample discussion of the future of environmental liability and conservation. Learning from the mistakes made before and after the red mud disaster and sharing ideas on how to improve future actions was the highlight of discussion.

You may find the presentations from the conference below.

Vito Buonsante Kolontar

Gergő Simon Kolontar Hungarian aspects

Gergő Simon Kolontar European aspects

Zoltan Ferencz Kolontar