Cyprus Mail

Safety fears over Vasilikos Energy Complex ignored

VTTV oil storage facilities

By Brian Lait

EARLIER THIS year the Sunday Mail published articles and letters about the planned Vasilikos Energy Complex, the inherent dangers attached to such ventures, the absence of any environmental study or compensation package and the protests by residents in the affected villages.

These articles gave rise to various comments such as “the authorities know what they are doing” (as with 98 containers of high explosives in Marí, 2011, or the bailout in 2013?), “scaremongering” (like the oil storage explosion at Buncefield in 2005, among others?) and, sadly, “Cyprus is in the EU and would not behave in such an irresponsible manner” (like the bailout, the Marí explosion and the Helios Airways disaster in 2005?).

All those who blindly believe in the infallibility of the authorities or who never dare challenge their decisions, or who naïvely regard the EU as some sort of super power of moral rectitude, need read no further.

Based on the Master Plan (MP) as it is called, which was commissioned by Noble Energy for the Cyprus government (a complete conflict of interest), the whole VEC, if given the go-ahead, will cover an area of some 25 square kilometres and include oil, LNG and LPG storage as well as ammonia and urea production, methanol and other associated petro-chemical industries. In addition, there will be loading and unloading for up to four tankers at any one time.

At present Vitol, through a subsidiary VTTV, are in the final stages of constructing 28 oil storage tanks with a capacity of 543,000 m3 (1.99 times the size of Buncefield in the UK which was also oil storage ) and the shipping facilities for the four vessels. They say they will be operational in July. The facility may be extended by a further 305,000 m3 making it 3.1 times larger than Buncefield.

Due to major international accidents in the past, regulations exist within the EU for projects involving dangerous chemicals, whether for storage or production purposes. The Seveso II Directive is the main piece of EU legislation specifically for the control of on-shore major accident hazards involving dangerous substances. This will be superseded by Seveso III in June 2015.

Seveso II is clear, but gives no information on how its requirements are to be achieved.

Article 1 simply states:
“This directive is aimed at the prevention of major accidents which involve dangerous substances, and the limitation of their consequences for man and the environment, with a view to ensuring high levels of protection throughout the community in a consistent and effective manner”.

Article 5 says:
“1. Member states shall ensure that the operator is obliged to take all measures necessary to prevent major accidents and to limit their consequences for man and the environment.
2. Member states shall ensure that the operator is required to prove to the competent authority referred to in Article 16 in particular for the purposes of the inspections and controls referred to in Article 18, that he has taken all the measures necessary as specified in this directive.”

Article 16 states:
“Without prejudice to the operator’s responsibilities, member states shall set up or appoint the competent authority or authorities responsible for carrying out the duties laid down in this directive.”
Article 18 covers “inspections, or other measures of control” by the “competent authorities” specified in Article 16 and the need for “at least one on-site inspection by the competent authority every twelve months of each establishment…”. Such inspections shall be a “systematic examination of the systems being employed at the establishment, whether of a technical, organisational or managerial nature….”Reports are to be prepared and, where necessary, followed up with the establishment.

The EU makes it clear that they will play a very limited part in the Seveso II Directive requirements in any member state. In their May 15 letter the European Commission, Directorate-General, Environment stated:
“The commission monitors the transposition and application of European legislation in general terms. The commission is not empowered to carry out detailed evaluations and inspections concerning individual sites covered by the directive. It remains the prerogative of the member states to define in accordance with the local situation the measures to be taken to comply with the directive. The directive does not include rules concerning the training or equipment of fire brigades.”

So, we may conclude that the installation, and regular review, of all safeguards in Cyprus is in the hands of the Cyprus government, and the EU will not check that anything has been done.
Noble’s MP makes considerable reference to the requirements of the Seveso Directives, but fails to comment on other essentials such as a well-equipped and trained fire brigade on land and at sea.

How do we find out about the implementation of Seveso II and other critical matters, such as the fire services and the environmental study, in Cyprus, especially with VTTV on stream in July with 28 oil tanks?
Noble Energy in Houston declined to respond to e-mails and a letter addressed to their chairman and CEO, Charles Davidson. Assistance to get a response was asked of the Houston Chronicle who acknowledged receipt of the third e-mail to them, but failed to comment further.

Contact with VTTV started at a local level with Marina Andreou, commercial manager, but a guided tour of their plant to understand all the safety measures she assured are being installed was declined due to “safety concerns”. A direct appeal to Ian Roper Taylor, CEO and president, of Vitol, the ultimate parent of VTTV for information was shrugged off, but Rob Nijst, CEO of VTTI (the immediate parent of VTTV) trumpeted the international standards applied by Vitol, etc. but declined to comment, for example, on what happens in the event of a catastrophic incident and the state of discussions with the Cypriot authorities as to how they would cope.

Our very own Commissioner for the Environment, Ioanna Panayiotou, only replied after the fourth e-mail reached her. In her four line response to questions regarding the environment and safety issues, she stated that prior consultation was carried out with the local authorities and that environmental and safety studies will be carried out.


Three e-mails to Giorgos Lakkotrypis, minister for energy, finally resulted in a civil service speak response from his industrial extensions officer:

“The issues of health, safety and the security of installations have been taken into account by the consultants for the preparation of the Master Plan while the Cyprus Fire Service was made aware and have submitted their comments.
“All of your concerns will be addressed in subsequent stages which include a strategic environmental impact assessment of the Master Plan, environmental impact assessment for each and every project and conformance of each and every project with health and safety legislation.”

Phew! That’s all right then!

Has the government complied with the requirements of Article 16 of Seveso II, as well as ensuring that the likes of the Fire Service are geared to assist in the case of a catastrophe both on land and at sea? The silence from Noble, avoidance of information by VTTV and non-answer from Lakkotrypis’s office might lead one to decide not, and yet the quantities of fuel stored by EAC at Mari and possibly at their other power stations probably require Seveso II to be applied anyway, regardless of any new developments such as VTTV.

Why is it so difficult to get straight answers to simple questions about such essential matters from supposedly responsible individuals and corporations?

Perhaps we still have the evasion of responsibilities and actions by officialdom so prevalent in the past, and about which the esteemed lawyer, Polis Polyviou, commented on in so much detail in his 600 page report on the Mari fire and explosion in July 2011? In his excellent book Corporate Risk and Governance – An End to Mismanagement, Tunnel Vision and Quackery the respected risk management expert, Dr Alan Waring (resident in Cyprus), reports extensively on the Mari disaster.

Paraphrasing Polyviou he says:
“(Polyviou) alleged that a relentless pursuit of vested self-interests by politicians and officials coupled with their incompetence, empty rhetoric and a ‘reduced perception of duty and selective observance of morality and legality’ had resulted in a deeply cynical and mistrustful populace. As Polyviou noted and Professor Phedon Nicolaides reiterated, the problem in a system based on favouritism and cronyism is that no one has any incentive to speak out and point up obvious wrongdoing, mistakes or risks. No one wants to take personal responsibility so decision avoidance, laissez-faire and buck passing become the norm along with lack of transparency and a generalizsd corruption of the spirit.”

As Dr Waring recommended in a report of his on another disaster:
“Safety procedures and safety culture at the site need to reflect the actual risks to life and limb on the ground and not be idealised aspirations or be diluted or ignored to suit commercial, political or other considerations.”
Sounds familiar!

With less than two months before VTTV start operations, and EAC are up and running again would someone in government like to step forward with some proper answers please?

 Brian Lait is a Cyprus based retired chartered accountant who lived and worked in a number of countries across three continents.

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