EU court ruling poses threat to plant jobs

THE European Court of Justice is to issue a ruling today which could pose a threat to the future of some jobs at the Aughinish Alumina plant in Askeaton, Co Limerick.

The Luxembourg-based court will make a finding on an application brought by the company and supported by the Government against a decision by the European Commission to end an exemption from paying tax on oil used in the production of alumina.

Officials in Brussels claimed the exemption had effectively constituted State aid for Aughinish — one of the largest employers in the Shannon region.

In documents filed to the ECJ, Aughinish warned some jobs at the Askeaton plant could be at risk if it was forced to repay over €8.1 million in excise duties as well as “a significant amount of interest”.

It informed the commission the continuation of the exemption was critical to the company’s survival.

However, in August 2006, the president of the ECJ’s Court of First Instance dismissed an application by Aughinish for an interim suspension of the commission decision.

Today, the ECJ will issue its final ruling in a case that also affects similar plants involved in the production of alumina in Italy and France.

Aughinish Alumina, which is now owned by Russian firm, United Company Rusal, employs around 500 permanent staff as well as 200 contract workers at its large facility in Askeaton.

The company had relied on a commitment given to the original promoters of Aughinish by the Industrial Development Authority as far back as 1970 that they would be granted tax exemptions on fuel oil, despite the fact the plant did not begin production until 1983.

The Government claims the exemption was the subject of legally binding commitments entered into before Ireland’s accession to the EEC in 1973.

Aughinish maintains that the removal of the exemption would cause it serious and irreparable damage at a vulnerable period of its operations. The company, which contributes around €100m per annum to the local economy, warned any job losses at Aughinish would have a catastrophic effect on the Shannon region.

The value of the exemption is estimated to be worth an average of €4.5m per annum since 1999.

However, the commission has promised it would only seek to recover any state aid granted since 2004.

In addition, Aughinish is no longer as reliant on oil for the production of alumina since its own €100m natural gas-fuelled power plant came into operation two years ago.