Orica forestalls chemical controversy
ORICA chairman Peter Duncan has insisted that no risk is acceptable to people living near the chemical company's Port Botany plant in New South Wales.
Recent independent tests found traces of arsenic, lead and mercury in the soil outside the plant.
Mr Duncan said Orica supported the NSW government's new independent review of emissions from the plant.
"I want to state very clearly to shareholders that we support the process established by the NSW government. I believe [Orica] can earn the confidence of the community and all our stakeholders," Mr Duncan told shareholders at Orica's annual meeting on Thursday in Melbourne.
Fairfax Media recently reported that independent soil testing by a mercury expert, Andrew Helps, found dangerous levels of arsenic, lead and mercury on a nature strip between Orica's Port Botany plant and a large residential area.
The Environmental Protection Agency plans to conduct an independent review, in consultation with NSW Health, on all information about historical mercury emissions at Botany.
Botany Bay mother Chantal Snell travelled to the meeting to deliver a petition containing nearly 8500 signatures to Orica demanding independent testing of mercury levels around the Port Botany site.
Speaking outside Orica's AGM, Ms Snell told reporters that she and others wanted independent off-site testing of mercury levels and not just a review of historical data on mercury emissions from the site.
"We are concerned, we are frightened for our health, frightened for our kids' health and frightened that we may be unwittingly putting them at risk," Ms Snell said.
Managers have told Fairfax Media that Orica's PVC and vinyl chloride plant used mercury-filled relief valves, which spurted mercury out of the side of the building when pressure inside vents became too high.
Mr Duncan told shareholders that Orica had spent "in the region of $200 million" on remediation projects to tackle legacy issues at the plant.
"These are unfortunately an inheritance. I think it is going to be quite a number of years before we can say that they are completely eliminated," he said.
In recognition of greater public demand for a socially responsible business practice, the company has also lifted its social responsibility weighting of chief executive Ian Smith's bonus payment to 25 per cent, from 10 per cent previously.
Mr Duncan said the past 12 months was "not a stellar year" for the company partly because of the flow-on impacts of problems at Kooragang Island outside Newcastle during 2011 and partly because of the external economic environment.
The company was forced to undertake major works at its ammonium nitrate plant at Koorangang Island. The site has been the scene of a series of serious mishaps, including the leaking of hexavalent chromium and ammonia over a nearby residential area.
"Whilst we have made physical changes to the plant, we are also working to re-establish our relationship of trust with the community," Mr Duncan said.
Orica's year-to-September net profit fell to $423.8 million, from $663.4 million, following a surprise $247 million write-off against its Minova unit.
Mr Duncan noted the company's performance in 2012 had been set against both a "difficult market environment" and a significant reorientation of the business.
The focus for investors was Orica's mining services division, amid caution over the effect of slowing global demand which, in the US, has been compounded by low gas prices resulting from a switch away from coal as an energy source, in favour of gas.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free