Austrian Environmental Scandal Could Influence Talc Dispute in Slovakia

(Stock photo by TASR)

Bratislava, August 24 (TASR) – One of the biggest ever environmental scandals in Austria could also influence the talc dispute in Slovakia involving EuroGas AG and Schmid Industrieholding (SIH), TASR learnt on Wednesday.

People who suffered damages in the federal state of Carinthia following a hexachlorobenzene (HCB) leak from a blue lime storage facility operated by Donau Chemie and Wietersdorfer Cement Works have filed law suits against the two entities, claiming compensation totalling €3 million. Meanwhile, it’s estimated that the total damage sustained by forest owners could be ten times as high.

EuroGas AG managing board chairman Wolfgang Rauball claims that the scandal also concerns the owner of the current holder of a licence for talc mining in Gemerska Poloma (Kosice region) – SIH from Austria.

“SIH was accused back in June of deliberately pretending that it was carrying out tests on HCB in chemicals that were later burnt at its own cement works and at Wietersdorfer’s facilities,” stated Rauball in a written statement for TASR. He added that SIH and the Wietersdorfer Cement Works are jointly active in Baumit Austria, with each company owning a 50-percent stake.

The Austrian authorities still haven’t registered any lawsuit against SIH over the HCB leak, however. Meanwhile, SIH’s chief Robert Schmid has publicly criticised Rauball several times for many statements that were allegedly false and predictions that didn’t come true. Rauball believes that SIH should be one of the entities held accountable for the environmental scandal.

“I’ve commissioned my lawyers from the USA to launch legal steps against SIH and its business partner Wietersdorfer Cement Works over the environmental scandal in Austria,” added Rauball.

Via its 100-percent subsidiary, SIH holds a licence for talc mining in Gemerska Poloma. Eurotalc has already invested €30 million in talc mining in the area, while the construction of various structures and installation of machines for talc ore processing have cost another €15 million.

“We’re counting on launching industrial talc production as of the beginning of 2017. We employ 40 people at the moment, with the number to be increased later to 100,” Schmid told TASR. At the same time he rejected Rauball’s claims that the latter’s loss of an earlier licence was due to corruption.

The revocation of the licence prompted Rauball, on behalf of EuroGas, to launch arbitration proceedings against Slovakia at the International Centre for Settlement of Investment Disputes (ICSID). As the petitioner in the arbitration, which was launched in 2014, EuroGas is demanding compensation of $3.2 billion (€2.9 billion) from Slovakia for what it calls a marred investment. It’s expected that a verdict on the arbitration process could be released in 2017.

No appeal against ICSID decisions is possible, although they can be overturned due to serious procedural flaws.

EuroGas began indicating its plans to take legal action against Slovakia over the loss of the talc quarry in 2010. At first, it demanded compensation of €500 million in 2011. One year later a company called EuroGas Inc., registered in the USA, also began claiming compensation. EuroGas asserted that its rights related to a trade agreement between the erstwhile Czechoslovakia and the USA from 1991 had been violated. The Slovak Finance Ministry has denied that any such agreement was broken.