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Overview
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Coode Island lies between Footscray Road, the Maribyrnong River, the Yarra River, and
Swanson Dock within the boundary of the City of Melbourne. The closest residential area is
across the river in the City of Maribyrnong where are located on the west side of
Whitehall Street, Yarraville and Hyde Street Footscray - about 800 metres from the island.Terminals Ptd Ltd
owns and operates a bulk liquid hazardous chemical storage facility on land leased from
the Melbourne Port Corporation. The company receives liquid products by pipeline from
ships and stores them in tanks. The chemicals are collected either by bulk road tankers or
in 200 litre drums.. Many of the chemicals are used in the production of products
including paints, plastics, lubricating oils, detergents, pharmaceuticals and health care
products.
Chemicals
handled at Coode Island fall into three main groups based on their Dangerous Goods
Classification, and on their potential to produce off-site effects. In decreasing order of
potential, they are:
Group 1 Acrylonitrile and propylene oxide
Group 2 Flammable and toxic chemicals (e.g. benzene and ethyl acrylate)
Group 3 Combustible and corrosive chemicals and other low hazard chemicals.
Terminals
Pty Ltd handles chemicals in Groups 1, 2 and 3. While volumes of Group 1 processed have
remained within 90% of 1991 levels (just over 32,000 tonnes in 1997), there has been
significant reductions in processing chemicals in Group 2 - 273,000 tonnes in 1992 to 1997
178,000 in 1997, a reduction of 35%. However there has been a 30% increase in other less
hazardous bulk liquids including tallow and vegetable oils.
P&O
Ports operates the largest facility (a container terminal) on the island, handing about
400,000 containers of non-hazardous goods each year, together with some 12,000 containers
and isotainers of dangerous goods from Groups 1, 2 and 3. The 12,000 containers equate to
approximately the same volume of hazardous goods handled by Terminals. Other operators
include King Transport who maintain a container storage area, and by Pacific Terminals and
Gordon Brandon who operate low hazard storage facilities.
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History
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In 1991 a site owned by Terminals Pty Ltd
was involved in a serious explosion which destroyed the storage area. A cloud of smoke and
chemicals resulting from the explosion spread to the city. On 27 August 1991 the then
Premier appointed the Coode Island Review Panel (CIRP) to make recommendations to
Government on the longer term storage of hazardous chemicals at port facilities.
In March the
following year the Panel released its final report and recommended that port handling and
storage of bulk liquid hazardous chemicals be relocated to West Point Wilson. The
Government accepted this recommendation. From 1993 to 1997 successive governments spent in
excess of $10 million on studies associated with the planning of the new site, through the
preparation of an Environment Effects Statement, and the selection of a company to build
and operate the facility.
In April
1994, as a result of the Commonwealth decision to proceed with the East Coast Armament
complex at Point Wilson, the Victorian Government stated that Point Lillias had replaced
West Point Wilson as the preferred choice for the new port and bulk liquid chemical
storage facility.
On 24
June 1997 the Victorian Government announced that the proposed chemical storage facility
at Point Lillias would not proceed. The Minister for Planning and Local Government, Robert
Maclellan, said the Government was satisfied that Coode Island was operating safely and
within all recognised standards. A taskforce comprising the Health and Safety division of
the Victorian WorkCover Authority, the Environment Protection Authority and the Melbourne
Port Corporation was convened to secure its long-term management.
In
August 1998 the Government accepted the finding of the Taskforce that the levels of risk
defined by Victorian, national and international criteria, were
acceptable.
The government wished to consolidate bulk chemical storage to the west side of Mackenzie Road, and lease the area east of Mackenzie Road presently occupied by Terminals Pty Ltd (Terminals) to P&O Ports for container handling and storage. Terminals were offered the lease of the old BP site west of Mackenzie Road, and were requested to prepare plans for the relocation of tanks from east of Mackenzie Road to the old BP site.
The Government recognised that the propylene oxide tanks east of Mackenzie Road and other tanks had not reached the end of their useful life, and offered Terminals $11 million to assist in the relocation/rebuilding of the tanks. Terminals were required to meet the highest standards of health and safety with the redevelopment, and obtain approvals from EPA and WorkCover.
The CICCC negotiated with Terminals to achieve an extended period of consultation on the plans being developed for the relocation of tanks to the BP site, and improvements to Sites B and C west of Mackenzie Road, prior to the Works Approval application being lodged. This process broke new ground for a Works Approval, and provided opportunity for full discussion of alternative layouts.
While the CICCC as a whole did not oppose the redevelopment, some members believed that moving the propylene oxide tanks closer to the Maribyrnong River, and further north, and hence closer to residential and other development near the Maribyrnong River, increased the risk to residents. Terminals and the EPA believed that moving of the propylene oxide tanks made no significant difference to the risk beyond the site boundary. The risks associated with the propylene oxide tanks were primarily to the uses on Coode Island.
The extent of community concern resulted in one of the CICCC community members lodging an appeal to VCAT which was supported in part by one other community member and the Combined Environment Groups.
In February 2001 EPA approved the Works Approval application, imposing conditions that would significantly improve the safety and environmental performance of the facility. While as a "greenfields" site, the old BP site would be constructed to very high standards, the B and C West sites involved incremental improvements to existing tanks.
At about the same time, unknown to the CICCC, Terminals were unable to negotiate firm long-term contracts with all their clients. A customer group known as the Victorian Chemical Manufacturers Bulk Storage Group (Huntsman, Dow, BASF, Orica and Rohm & Haas), who wanted more competition in the market, invited other companies to tender to store various products. An agreement was reached with Marstel (a company with small scale storage operations in New Zealand) to store propylene oxide, benzene and some other products. The group then approached the Government to allow Marstel the lease of the former BP site. As Terminals had not been able to meet one term of their grant deed from government (securing long-term contracts with all customers), the Government revoked the right of Terminals to develop the BP site, and allowed Marstel to apply for a Works Approval for that site.
Introducing a second bulk hazardous chemical storage company at Coode Island raised a number of difficult issues. Would Marstel manage to get firm contracts with all five companies? What products would Terminals be able to store on the B and C West sites? What improvements should Terminals undertake on these sites? Would the Marstel facility be ready in time for Terminals to decommission tanks on the west side of Mackenzie Road, and remediate the site (to remove chemicals that had seeped into the ground and water table). How would the $11 million government grant be allocated between the companies?
Although it is too early to provide definitive advice on all these issues, some matters on which greater clarity is emerging are listed below.
Marstel appear to have secured firm contracts with only Huntsman and Dow, for the storage of Propylene Oxide, benzene and a range of other chemicals. Terminals have secured storage agreements with BASF, Orica and Rohm & Haas. Their products will be stored on Terminals' existing sites west of Mackenzie Rd. The initial scope of the Marstel Works Approval application was for 36 tanks. This has been reduced to 11 tanks and EPA has issued a Works Approval. A feature of the Marstel proposal is the use of slightly pressurised tanks, and a ship-shore vapour recovery system. During filling and emptying of tanks, vapours are piped back to the tank where the product originates. A similar vapour recovery system is anticipated for road tankers. In this way, emissions are reduced significantly.
The gap between when Terminals must cease handling various products and when Marstel's replacement storage for these products is expected to come on line has been acknowledged. After over a year of denial by Government, and insistence that the "iron-clad" contractual requirements between Melbourne Ports Corporation and P&O Ports for the lease of the Terminals area west of Mackenzie Road could not be changed, the Department of Innovation, Industry and Regional Development is negotiating with Terminals to extend their lease past the July 2004 deadline to avoid "the gap".
Terminals has reviewed its plans for upgrading the B and C sites west of Mackenzie Road. It has signed a 20 year lease with the Melbourne Port Corporation for these sites, with the requirement to upgrade them. On 14 March 2002, the EPA issued a new licence to Terminals requiring upgrading of the plant including providing a new combustion (incinerator) system to control vapour emissions. The licence conditions are similar to those in the works approval previously issued in February 2001. EPA did not require further public consultation (although Terminals did outline its proposals to the CICCC). It appears that the $11 million government assistance for the upgrade all go to Marstel (i.e. none of it will be made available for the Terminals upgrade).
The CICCC has had continuing concerns about the lack of adequate emergency communication procedures for residents. Terminals and the CICCC commenced developing a community alert plan involving community radio 3WRB-974 FM. As a result of continued pressure by the CICCC on the issue of communication to residents about emergency procedures, the Government has now funded a major study on the issue. The project is being primarily managed by the Office of Emergency Services Commissioner, however the Maribyrnong City Council is a lead stakeholder and the collaboration between the two organisations has enabled a comprehensive process of community consultation and engagement that will form the basis for an integrated (and sustainable) community alert and information system. The CICCC welcomes this study, which, it is hoped, will coordinate communication of emergencies (and false alarms) from all major hazardous sites in the Coode Island, Footscray, Spotswood, Yarraville area.
Two recent matters of importance are the proposed sale of Terminals (as a going concern) by its owner, Burns Philp, and the preparation by Terminals of an Environment Improvement Plan as required by EPA. The draft plan sets out a timetable for the progressive improvement of the Terminals facility, and sets out clearly the matters presently deemed unsatisfactory by EPA.
Updated July 2002
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