European Parliament calls for compensation for citizens affected by disasters such as the Castor Project

Brussels (CNA).- The European Parliament urged this Thursday that future victims of disasters such as the Castor debacle be entitled to financial compensation. This business project, consisting of a submarine facility that started to be built in 2008 to store 1.3 billion cubic metres of reserve gas for Spain, failed after triggering small earthquakes on the coast of Valencia and Catalonia’s Ebro Delta. The text adopted, promoted by the Greek MEP Kostas Chrysogonos, explicitly denounces the Castor case and the 1,000 earthquakes suffered by the neighbours of the area. In an interview with the Catalan News Agency, Chrysogonos described the Castor case as “a scandal”. “We need new rules at European level to ensure that such a thing like what happened in Castor will not repeat itself in the future”, said Chrysogonos. 

The report, which was approved by 506 votes in favour, 106 against and 15 abstentions, proposes to “include the victims of collateral damage linked to prospecting, surveys and the operation of offshore facilities” in the potential beneficiaries of future compensations. Thus, in the case that a situation like Castor repeats itself, residents who suffered earthquakes could claim compensation in accordance with European standards.

“It is very important that all those affected by offshore oil and gas operations, which are proved to be in detriment of the environment and of the activities of other persons be compensated”, claimed Chrysogonos. “Offshores oil and gas operations are obviously endangering the environment and the economy as a whole, because they can have serious repercussions, as the Castor case indicates”, he added.

The mention of the situation suffered in the Terres del Sénia was added to Chrysogonos’ report thanks to an initiative from the Catalan MEP Francesc Gambús, who celebrated that for the first time a European text refers “clearly” to the disaster caused by Castor.

Citizens footing the bill for failed Castor Project

What happened with the Castor Project “cannot be acceptable in a democratic society”, said the Syriza Greek MEP, referring to the fact that the Spanish Government had to issue a €1.35 billion compensation package to Escal UGS, the company behind the controversial submarine gas facility. This is due to clause 14 of the 2008 Royal Decree, according to which the state would accept the responsibility in the event of the project failing to be completed.  

The bailout is being paid for since April through consumers’ gas bills. In other words, citizens are footing the bill and will do so for over 30 years for a project they rejected from the very beginning.

“Spanish Taxpayers have to now share the burden for the operations of a private company which would have taken all the profits”, lamented Chrysogonos. “The damages are going to the taxpayer”, he said.

“We must ensure that societies will not share the burden, which is caused by individual private companies. We must ensure that taxpayers will not be held liable for private activities”, Chrysogonos claimed. 

Platform of Sénia celebrates the measure

The Citizens' Platform in Defence of the Terres del Sénia celebrated as a deferred victory the motion approved this Thursday by the European Parliament. A measure, said the spokesman of the organisation, Evelio Monfort, that arrives with years of delay, but that should be used to prevent similar cases. “All the locals, from Benicarló to Sant Carles de la Ràpita, would currently be receiving compensation for damages such as cracks and moral damages”, without having to litigate in court, if such a measure existed before, Monfort stressed. Rather, so far only the company behind the Castor Project has been compensated.

The Platform, which maintains an open complaint to the European Parliament’s Committee on Petitions (PETI) against the compensation that the Spanish Government issued to Escal UGS, believes that the measure passed is largely a result of the Platform’s trips and pedagogy made in recent years in Brussels, along with most of the Catalan and Spanish political representatives to the European Parliament, except the Conservative People’s Party (PP) and the liberal Unionists Ciutadans (C's). “It's a very good sign that a man from Greece knows what happened in Spain with the Castor Project, while Spanish politicians still do not know it. Maybe someone will have to go to Greece to be taught”, Monfort appraised ironically.

The victims, however, lamented that the measure comes “eight years late” - the project was presented in 2008. “Too late”, said Monfort, not only to get any compensation, but also to recognise and assume responsibilities for the thousand earthquakes that have occurred since September 2013. “The company says there have been no earthquakes, that they did not exist, according to its president”, he regretted. “Nobody recognises the discomfort we had, they say it is a farce”, Montfort protested. However, he added, the only one compensated has been the company. “They harm and get compensated. The people who suffered, have to pay. Wonderful”, he lamented.

The Castor Project fiasco

The Castor Project consists of a submarine facility that started to be built in 2008 to store 1.3 billion cubic metres of reserve gas for Spain, in a former oilfield located 1.8 km below the seabed under a layer of impermeable rock. It was meant to contain 30% of Spain’s daily gas consumption.

The offshore gas reservoir was the first to be financed under the new Europe 2020 Project Bond Initiative. Escal UGS turned to the European Investment Bank (EIB) so as to secure funds and the lending institution granted €1,400 million worth of bonds to the company.

This was exactly the credit that Escal UGS had to return to the investors before December 2014 and the amount that the Spanish Government issued to the company, due to a clause in the 2008 agreement between them in which it was established that the state would compensate shareholders if the project had to shut down, even if the reason was negligence or deceit traceable to Escal UGS.

The Spanish Government made a futile attempt to reverse this clause, appealing to the Spanish Supreme Court on May 2012, but it was rejected. Therefore, taxpayers have now to foot the bill for the mistakes of others.