Destroying information and an "amicable divorce"

by DOUGLAS SHEPHERD

Newly released documents reveal how senior Borders council officials and top brass from a debt-ridden waste management company discussed the possible need to destroy sensitive information following the decision to pull the plug on a multi-million pounds treatment project.

One of the last acts in the disastrous relationship between Scottish Borders Council and New Earth Solutions Ltd. (NES) was the signing of a six-year confidentiality agreement which kept hundreds of documents and items of correspondence under wraps from 2015 until this year. But now the vast collection of paperwork is being made public for the first time after a Freedom of Information request to SBC. 

At the centre of the abandoned £80 million contract between SBC and NES was a £23 million project for a "state of the art" waste treatment plant to deal with the region's black bag rubbish at Easter Langlee, Galashiels.

But as most locals know the 24-year contract, signed in 2011, had to be shelved four years later when NES could not come up with the money for the treatment facility while the company's much trumpeted New Earth Advanced Thermal [NEAT] technology simply would not function.

The decision by council officials to terminate the contract was conveyed to NES executives at a private meeting on February 10th 2015. The notes of proceedings at that meeting are among the documentation obtained via FOI. The identities of a number of the participants have been redacted so that only initials are used. But the names of council representatives are included.

This paper shows the council had already drafted a press release before telling NES of their intention to deem the project agreement (PA) dead in the water.

At a pre-meeting before New Earth directors were called in, CS from law firm Brodies, the council's legal advisers for the project who collected more than £650,000 in fees, said he would talk them  through/show them [NES] the relevant parts of the PA that set out that no compensation was due.

The council's Rob Dickson (RD) told colleagues that on funding NES were in a far weaker position than they were at signing of the PA or the Deed of Variation (2012). He added that the financial model was only marginal and was based on a lot of assumptions and on this basis NES were overly optimistic on funding.

When the two sides did get together and the decision was conveyed to the NES team their man DS commented that this was "not a complete surprise". He added that NES were looking for an “amicable divorce”.

But after reviewing the council's draft press release DS said that while the general flavour was OK there was too much detail in the middle section. He added that NES want to emphasise that the project was an innovative project that NES and SBC had been working on for some time and that the market landscape had changed.

The meeting note then goes on to show: "DS asked whether there were any termination obligations on the transfer of information/documents between NES and SBC.

"CS said that there are provisions in the PA regarding “confidential information” and that Brodies would advise on this.

"RB said that NES considered the financial model and NEAT technology documents confidential.

"CS, having consulted the PA, confirmed that while there was no obligation on either party to return confidential information there was an obligation to maintain records for five years after the termination of the PA. He added that the parties could reconfirm or restate these obligations.

"RD said that if NES thought that there was information SBC held that NES wanted returned or destroyed to let SBC know.

"RB highlighted that NES would like the NEAT data that had been passed to (consultants) SLR returned/destroyed and asked about Freedom of Information/Environmental Information matters.

"RD said that this was a good point and that SBC needed to establish a party line on this. He also said SBC and NES should agree between them what information was “confidential” and how to deal with it.

"CS mentioned that Freedom of Information/Environmental Information legal requirements could trump confidentiality provisions.

"RD said that SBC’s base position was not to release any information from the PA or Deed of Variation and if they were under pressure to release any such information they would speak to NES first."

The so-called 'amicable divorce' cost Borders taxpayers more than £2 million while NES - soon to be dissolved with huge debts - also spent several millions on the doomed project.

A confidential report on the fiasco submitted to SBC councillors on February 19th 2015 also referred to the possibility of a PR disaster.

The document, written by Ewan Doyle, the Easter Langlee project manager, says: "There is an obvious risk that the decision to terminate the New Earth Solution contract, after the Council has spent circa £2M to get it to this point, will be the opportunity for press to create a negative story that will be published locally and there may also be national press interest. 

"The Project Team will endeavour to get a joint statement prepared with New Earth Solutions to proactively go to the media with, otherwise the Project Team and Corporate Communication have drafted a press release to answer the anticipated media enquiries."

Later the published statement told readers: "Since the contract was signed in April 2011 there have been significant changes with regard to Scottish waste policy and regulation, and project-specific issues in terms of technology and funding, the council revealed."

There was no mention of the substantial loss of public money which had to be subsequently written off by the council.