Dutch NGO seeks $1.6 billion from Tata Steel for environmental damage

New Delhi: A Dutch nonprofit organisation Stichting Frisse Wind.nu (SFW) has sent legal notice to Tata Steel’s unit seeking $1.6 billion (Rs 14,810 crore) compensation for alleged environmental harm and health damages caused to people in Netherlands due to hazardous emissions.

The NGO has filed writ petition against Tata Steel’s two subsidiaries Tata Steel Nederland BV and Tata Steel IJmuiden BV in the District Court North Holland, Tata Steel said in a regulatory filing to the stock exchanges on Friday. The legal notice was served on December 19.

“SFW seeks approximately EUR 1.4 billion in compensation on account of increased susceptibility to various health issues and the loss of enjoyment of homes, as the average home value in the region demonstrably lags behind that of comparable regions,” Tata Steel said in filing to the BSE.

The proceedings initiated by the NGO concern a collective action under the Dutch Act on Collective Settlement of Mass Claims. In this action, SFW states that it is acting on behalf of residents living in the vicinity of Tata Steel IJmuiden BV.

The proceedings pertain to allegations by SFW, holding Tata Steel IJmuiden BV liable for alleged damages caused by the company’s operations in Velsen-Noord (including, most importantly, emissions of hazardous and/or harmful substances).

Tata Steel share price fell 0.50% to Rs 169.15 apiece. It slumped to a low of Rs 167.85 in the intra-day. Tata Steel was among the top losers on the Nifty 50 index.

Scrutiny has mounted over Tata Steel’s European operation in the recent year. Last year Dutch regulators threatened EUR 27 million fines for toxic emissions. The NGO’s lawsuit is perhaps the biggest damage claim against the company for environmental harms.

According to Tata Steel Nederland BV and Tata Steel IJmuiden BV (collectively referred to as TSN), the NGO has provided no supporting evidence for the claim, making it unsubstantiated and speculative. TSN rejects their claims as being "without any basis".

However, Tata Steel noted in its regulatory filing that the “Company was examining the documents provided by SFW, was in discussion with counsels and assessing the potential implications of the claim.”

It claimed that “TSN is committed and will continue to focus on environmental preservation and addressing community concerns through collaboration with the Government and other stakeholders towards a sustainable future for all stakeholders.”

In September this year, Tata Steel announced a project costing EUR 6.5 billion to cut emissions at its Netherlands units. Out of this, the Dutch government has committed to contribute EUR 2 billion.

Tata Steel claimed that through substantial investments, TSN has achieved significant improvements in areas of concern for the neighbouring community over the past five years. “Additionally, TSN consistently ranks among the leading global blast furnace-based steel producers in terms of CO2 efficiency, with performance metrics well below both European and global averages,” it said.