THE SYDNEY MORNING HERALD

Shell ‘softened’ damning environmental report to break lease

Saffron Howden Friday September 24, 2010

SHELL abandoned an old petrol station in Sydney knowing it was contaminated, then told its health risk assessors to change their report to ”soften” their findings, the Supreme Court has heard.

Yesterday Shell Australia was found to have deceived and misled the new owner of the Cabramatta land, Haissam Assafiri, and to owe him more than $1 million. In his judgment, Justice Robert McDougall said the petrochemical company did not remediate the Hume Highway site, which was a petrol station for 30 years, to the level required under its final ”demolition” lease in 2007. Instead, Shell left a concrete slab that was too ”severely deteriorated” to contain the polluted soil.

Even if the slab had been an appropriate way of ”capping” the soil, it would not stop pollution spreading through groundwater, he said.

Internal Shell emails show the company would save money by vacating the site early, which it owned until 1996 but then leased back through an investment firm.

One internal email referred to a potential saving of “approx $600k!!” for Shell if it met the earlier deadline to clean the land for a future ”best use” scenario.

An August 2005 environmental assessment report found that potentially dangerous chemicals could move off the land.

”The report suggested that this could affect workers undertaking excavation near the site and, perhaps, residential properties to the east of the site,” Justice McDougall said.

But when Shell engaged the consultants URS to carry out an environmental risk assessment at the site in 2007, it ”made a substantial contribution to the final form of that report”.

One Shell employee wrote to URS: ”The way this paragraph is worded gives the impression that groundwater contamination in that area of the site has occurred … If you are to include this section, might want to soften it a little …”

Justice McDougall found Mr Assafiri, who sub-leased the land for between the late 1990s and 2005 and then bought the property in 2006 expecting it to be remediated by Shell, was entitled to damages of more than $1 million for misleading or deceptive conduct and breach of contract.

Shell said it may appeal.

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