Opencast mine owners cannot walk away from clean up, court rules
Owners of failed opencast mines in Scotland cannot walk away from their obligations to clean them up, a court has ruled.
Scottish Coal's liquidators now face huge bills after a previous verdict allowing abandonment was overturned on appeal.
Campaigners welcomed the ruling, saying those responsible for environmental damage should be held to account.
But the liquidators said a long-term solution still had to be found.
Scottish Coal operated opencast mines in a number of areas in central Scotland including Ayrshire, South Lanarkshire and Fife.
The firm went into liquidation in April this year, while another company running opencast mines, ATH Resources, was wound up in May.
An earlier decision at the Court of Session accepted the liquidators' argument that the sites are too costly to maintain, using up cash which might otherwise go to creditors.
The Scottish Environment Protection Agency and the local authorities involved appealed the decision.
The court heard that clean-up bills have been estimated at about £500,000 a month, while clearing the sites to comply with planning rules would cost another £73m.
Blair Nimmo of KPMG, acting as liquidator for Scottish Coal, said the court case was important to clarifying unprecedented complexity in the case.
However, he added that the ruling does not provide a long-term solution to fund restoration of the sites, which in East Ayrshire alone could cost more than £63m.
The ruling of the appeals division of the Court of Session reversed the previous decision saying that "a person cannot 'abandon' land, in such a way as to render it ownerless, and thus avoid any obligations which run with the land".
Mr Nimmo said the effect of the ruling was to ensure that funds realised by selling some assets to the mining firm Hargreaves Services last July, will now be used to maintain the eight remaining Scottish Coal sites. Once these run out, he said Scottish Coal will be dissolved.
That means that, regardless of the appeals court ruling, there is insufficient funding to restore the sites.
Mr Nimmo said a further appeal is being considered: "The complexity of the issues raised in Scottish Coal's liquidation was unprecedented and we had no option but to seek the guidance of the Court of Session to determine how to proceed.
"Unfortunately, the Court of Session's decision does nothing to solve the environmental damage left behind."
He said funds will continue to be used for care and maintenance of the sites: "However, in the context of the overall costs of restoration, these funds are simply a drop in the ocean. As has been the case since our appointment in April 2013, any long-term practical solution for these sites would still require the involvement of another party or parties."
"We would therefore urge the public bodies who are already engaged in attempting to find solutions to redouble their efforts as the court decision does not solve the problem".
Lang Banks, director of environmental group WWF Scotland, welcomed the decision of the appeal judges.
He said: "Polluters must never be allowed to profit at the expense of the environment or communities.
"We hope it will help ensure that those responsible for environmental damage are held to account now and in the future.
"This whole saga underlines yet again why Scotland should be drawing a line under the extraction and use of fossil fuels such as coal."
The Scottish Opencast Communities Alliance warned the ruling may make little practical difference to the prospects of Scotland's current abandoned mines being restored.
A spokesperson said: "This court decision only stops Scottish-registered companies abandoning mines when they go bust.
"Companies registered in England have always had the legal right to abandon sites, and unfortunately almost the whole of the opencast industry in Scotland is now owned by English-registered companies. So we still have the same problem."
Responding on behalf of East Ayrshire Council, chief executive Fiona Lees welcomed the appeal court ruling, and hoped it would bring clarity to identify solutions for the sites.
"Finding a solution requires a joined-up approach involving many organisations and we are taking a lead role in bringing together all key stakeholders.
"There are a number of actions in progress, including discussions with the landowners, meeting with current operators to identify how they can help and we are of course continuing to engage with the various bond providers to maximise the sums that can be recovered in order to deliver the best alternative restoration scheme that can be achieved for each site.
"Our first priority remains the need to safeguard the communities of East Ayrshire".
Scottish Green MSP Patrick Harvie said the ruling was a "welcome injection of common sense" and praised Sepa for bringing the appeal.
He added: "The coal industry must face up to its legacy and fulfil its obligations to maintain and restore the environment that it has wrecked.
"While ministers continue to block a public inquiry, I hope today's ruling underlines the need for an urgent look into the wider financial mess that is coal mine restoration. The public has a right to know what went wrong."
Scottish Labour's environment spokeswoman Claire Baker said the court's decision had been only half the battle, adding: "We must now ensure that these sites are fully restored and the workers affected by Scottish Coal's liquidation are given full support in finding new jobs."
And Scottish Liberal Democrat leader Willie Rennie added his voice to calls for a wider inquiry into the collapse of Scottish Coal.