Borealis Reaffirms Halt to Belgian PDH Plant

09.08.2022 - Borealis has reaffirmed the suspension of construction on a new propane dehydrogenation (PDH) plant at Kallo, Belgium. The Vienna-based group cited “serious allegations” concerning a two-subcontractor joint venture that is being scrutinized by Belgian authorities.

Restart of work on the mega project on the outskirts of the Port of Antwerp will remain in limbo to allow time for investigation and additional social compliance measures, Borealis said. The chemical producer initially halted construction activity on Jul. 27 for what was expected to be three days.

The olefins, polyolefins and fertilizer producer said it had also suspended its agreement with the joint venture of Italy’s IREM and France-based Ponticello Frères, which was awarded the contract for piping and mechanical work in 2021. The project’s engineering contractor is Italy’s Tecnimont.

For facilities such as the Belgian PDH facility, Borealis said the contracts include the usual safeguard clauses that oblige work supervisors to comply with all applicable laws, in particular social legislation.

The group added that the teams actually engaged at the future PDH site initially were not aware of the allegations, but the accusations of “social fraud” became clear later in “particularly alarming” press reports at the end of July.

“In line with our Goal Zero approach, we are currently putting in place additional social controls to identify and address any potential lack of control by contractors as quickly as possible,” Wim De Smet, site manager for Kallo said.

Borealis said it is working closely with local social inspectors and has also engaged an external law firm to analyze the case. According to Belgian reports, some construction workers from the Philippines and Bangladesh were being paid a monthly wage of €650 for a six-day work-week. The workers may have been hired by a temporary employment agency, it was suggested.

In a statement, Ponticelli said it does not employ any of the employees in question nor does it work with the interim recruitment agencies concerned.

Belgian tabloid newspaper Gazet Van Antwerpen said Borealis had been tipped off in May that there might be irregularities at the construction site but delayed action out of concern that the plant’s start-up – originally planned for mid-2022 – could be endangered.

Author: Dede Williams, Freelance Journalist