Liquidators formally disclaim toxic substance being stored in Southland after company collapse

Monday, 18 December 2017

A toxic substance being stored in the former paper mill building at Mataura and at sites at Awarua, near Invercargill,  won't be moved anywhere soon.

The liquidators of Taha Asia Pacific Ltd and Taha Fertilizer Industries Ltd, which are both in liquidation, have formally disclaimed that the about 22,000 tonnes of oxide residue remaining  is currently stored at various locations around Southland.

Liquidator Rhys Cain, an executive director at EY, said dealing with the residue, also known as ouvea, had been a very complex liquidation issue.

The premix is a class six hazardous substance used to produce phosphate fertiliser. If saturated with water, it can produce ammonia gas.

'We have worked hard to get a workable, realistic solution for those directly affected as well as the people of Southland.

'While an effective and safe disposal solution has been found and can be implemented, along with backup options, there are no funds available in the liquidations for the liquidators to take the matter further. We inquired with the Taha parent company based in Bahrain regarding providing some funding but have had no response.'

The solution involves the removal of the stored product offshore to be disposed of and the costs involved are primarily transport costs for getting the ouvea to Bluff and then overseas.

A contractor has been found to move the product as well as a destination where the ouvea can be safely disposed of; all that is missing is the funding for the removal costs.

Cain declined to say how much it would cost to remove the substance but it is believed to be in the hundreds of thousands of dollars.

'This lack of funding, combined with the impending expiry of the resource consent at the Mataura storage site, means the liquidators have no option but to formally disclaim the oxide residue as onerous property pursuant to section 269 of the Companies Act 1993,' Cain said.

'This disclaimer means disposing of the ouvea is now the responsibility of a group of interested parties, including central and local government and the landlords of the storage sites. It brings to an end the rights, interests and liabilities of the companies in liquidation in relation to the ouvea. Treasury has been informed of the liquidators' decision and is reviewing its position.The liquidators want to thank the group of interested parties, particularly the landlords, for their help and support as they've worked through the complex issues involved with the oxide residue.

'We have discussed the current position with the group of interested parties and we wish them all the best as they look to secure the necessary funding to dispose of the oxide residue once and for all.'

The premix, which is an oxide residue, was owned by Taha Asia Pacific Ltd, which went into liquidation in August 2016 owing creditors more than $4 million after its contract with New Zealand Aluminium Smelters to process the ouvea premix expired and was not renewed.

Gore District Council chief executive Stephen Parry said the council would ensure that the conditions of the retrospective consent to store the premix would be maintained while it remained in Mataura.

'We have engaged a company to continue monitoring the site for ammonia gas until such a time as the substance is moved.

'We'll be there for the long haul to ensure that its safe.'

The council was also seeking a legal opinion on who holds the consent to store the premix now that the liquidator had been unable to find a solution.

A statement from Michael Laws on behalf of Southland Storage Ltd which owns the Mataura building, said the decision of the liquidator to legally disown the ouvea premix should not automatically end the responsibility of the liquidators.