Mr. Gerard O'Leary:

Every year since 2007, when we published our drinking water report, we have talked about a sustainable model for safe and secure drinking water. We developed it on foot of what we saw unravelling in Galway city with the cryptosporidium incident. The local authority was effectively blending treated water with raw water. As long as the water in the Corrib was fine, blending was going to be acceptable. We assess drinking water quality against 48 standards, one of which involves fluoride. They are all set out in EU legislation and implemented in national legislation. The problem we envisage is that there are dangers in the catchment that have to be managed. Incidents can occur in the catchment that are dynamic and the quality of raw water can change. When there were flooding incidents, we saw that plants were overwhelmed. Therefore, the security aspect, which we have really been driving, is such that the water needs to be safe tomorrow morning and the week afterwards.

As such, the system needs to be robust enough and procedures need to be put in place at treatment plants to handle changes in water quality. For example, there were restrictions in Dublin last year because the chemistry of the raw water changed. The scientists in Dublin City Council had to adapt to treat it. Our model is to ensure that drinking water complies with 48 safety standards and, more importantly, its supply is secure. The latter point has been neglected, although we have been driving it. We have a number of water safety plans in place. We would like to see every area have a safe and secure supply of drinking water. Post its incident, Galway City Council was one of the first local authorities to have a water safety plan.

At the start of this year, we had €8.3 million set aside in various instruments for our industrial activities. We have built up that fund across all licensed activities to €77 million, but we need to do more, for example, various forms of security bonds, secured accounts and parental company guarantees. Following a public consultation process last year, we produced guidance this year on how companies can establish the risks. There are two types of risk. First, activity at a site may lead to an accident. Second, there is the inevitable closure cost. The figure of 25 million tonnes relating to the Aughinish Alumina plant stems from that process. Now and then, we need to adjust financial instruments so as to ensure that risks are clearly monetised. In recent weeks, we published a consultation document on the various types of instrument that we require for financial provision. Of paramount importance is that, when something happens, money must be available. When money was previously set aside in receiverships, it seemed to go to the receivers or the banks. In this regard, we are following up a case in the Supreme Court.

We have financial provisions across our activities and are building on same. Last week, we discussed matters with the European Commission and identified that this was not just a challenge in Ireland, but across the EU. We are reviewing all of our activities, including at the Aughinish plant, with a view to strengthening the financial instruments so that the inevitable cost of cleaning up sites can be met.