ROMANIA: Foreign Corporation Faces Public Scrutiny

  • by Claudia Ciobanu (bucharest)
  • Friday, May 29, 2009
  • Inter Press Service

The case is being seen as a sign that foreign investments are no longer blindly welcomed in Eastern Europe.

The largest wood products manufacturer in south-eastern Europe, Kronospan has been investing in Romania since 1999, and currently operates three production points: one in Alba, western Romania, a second in Brasov, in the centre of the country, and a third in Constanta, on the Black Sea coast.

One of its most controversial actions has been the construction of a second production line at its plant in Sebes, Alba, in 2007. The new line will be used to manufacture formaldehyde, necessary for plywood adhesives. Kronospan only obtained the necessary approval in April 2009, after it had already built the new structure.

On May 13, two citizen groups from Sebes, The Independent Centre for the Development of Environmental Resources and The Independent Centre for the Protection of the Environment (CIDRM) filed an administrative complaint against the decision to grant construction permits to Kronospan only later.

'Since the installation is already in place, any urban plan made to assess the impact of this production line would basically adapt itself to the existing structures, which defeats the whole purpose of using the urban plan as a means to evaluate the impact of various locations and the utility of the construction,' CIDRM director Dan Mercea told IPS.

The legality of the authorisation granted in 2009 for the already existing production line is being further challenged on grounds of conflict of interest. At the time the environmental agency in Alba was evaluating the granting of permits to Kronospan, the head of the agency was Vasile Todea, who was also the only stakeholder in Luxor Ltd., one of the main business partners of Kronospan.

This fact, brought to public attention by the local groups, led the Court of Appeals in Alba to suspend Todea from his position as head of the environmental agency in March 2009.

A similar controversy surrounds construction of the Kronospan plant in Brasov. Kronospan started to build its plant in Brasov in February 2008 on the basis of an expired environmental permit, according to CIDRM. The company tried to prove in court that the permit was still valid, but the municipal court in Brasov accepted the arguments of CIDRM.

The court argued that, since the permit granted to Kronospan Brasov expired in 2007, when tougher environmental standards were introduced in the country's legislation because of entry to the European Union, the environmental permit cannot be renewed automatically, and the construction plan must be re-evaluated.

An appeal by Kronospan against this decision was rejected by the Appeals Court in February 2009, and building of the plant has been halted.

One of the main concerns of locals in Sebes and Brasov is the potential toxicity of formaldehyde. Formaldehyde released into the atmosphere is one of the main components of smog. The substance can be threatening to human health in more direct ways as well: according to the International Agency for Research on Cancer, occupational exposure to the substance can lead to cancer, and the World Heath Organisation has declared formaldehyde potentially cancerous.

Although the cancerous effects of the substance are still under debate in the medical community, the inhabitants of Sebes, where Kronospan operates its formaldehyde production line less than 300 metres from residential areas, have expressed concern about their safety ever since the plant was built.

Several incidents, when the emission levels for formaldehyde exceeded the permitted level over five times, or when spillages of toxic substances were registered, led the local environmental agencies to fine Kronospan.

Kronospan denies any wrongdoing. 'Unfounded accusations have been brought against us continually,' Adrian Bacila, production director of Kronospan declared in a public statement sent to Romanian media. 'We have always been open to any study or analysis of our activity. But, until now, no study has shown that we are systematically breaking the legal levels of emissions or that the activity of our company endangers the lives of people.'

Representatives of the company attending public debates in Sebes and Brasov have provided detailed pictures of technological upgrades being implemented at their production lines in order to limit the risks of dangerous emissions or accidents.

© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service

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