|By Josh Salman, The Bradenton Herald, Fla.|
|McClatchy-Tribune Information Services|
The quasi-government agency and HRK disregarded a mandate to obtain
The safeguard was written into the 2007 contract for cleanup relief in the event of an environmental disaster -- like the subsequent storage liner rip that sent 170 million gallons of toxic water gushing into
But both parties went ahead with pumping sludge from the port's Berth 12 dredging project into gypsum stacks at
The shortcut is the latest questionable decision discovered by the Herald that may have worsened the impact of the toxic spill and the
"Neither port staff nor HRK personnel were able to obtain the type of coverage envisioned under the contract," said
Insurance experts speculate it was instead a matter of cost, with both parties seeking to avoid premiums much higher than they first anticipated.
Insurers also would have shied away if preexisting environmental conditions were
too dire -- a strong sign the storage of dredged materials shouldn't have occurred there in the first place, said
"If I was the county or port, I would be very concerned right now," he said. "To sign a contract and then not be able to get insurance is a huge red flag. If you can't get insurance on the activity, you probably shouldn't be doing it."
There are dozens of insurance firms in the U.S. that specialize solely in hazardous and environmental insurance. If those traditional companies decline a policy, surplus lines usually step in.
The surplus lines market -- which are private insurers not regulated by the state and with no caps on premiums -- tend to cover anything at a price, even dynamite mining, said
"Surplus lines will provide coverage for very risky things that no other regular insurance would touch," Miller said. "Everything is insurable at a price."
Port attorneys were unable to produce any documentation that shows they were declined a policy. Traditionally when a party is shopping for policies of any kind, the insurer will provide written notification identifying the risks involved in their decision, said
She too believes cost was the underlying factor. HRK officials did not respond to calls and emails seeking comment.
"There's insurance for almost every type of risk -- but for what price?" McChristian said.
Port attorneys notified
The dredging was completed in October, but the environmental fallout can still be evidenced today, with high levels of ammonia in an on-site drainage ditch and watershed that's contaminated with dredging sediment, according to the
HRK is now battling Chapter 11 bankruptcy with
But a series of
The DEP also allowed HRK to get by without applying a commonly used protective dirt cover over the exterior of the gypsum stack, which could have prevented sun damage that's believed to have contributed to the rips, reports show.
Meanwhile, the state drastically reduced HRK's mortgage note on the site and never vetted the dredging disposal contract for accuracy. Environmental groups now fear those decisions have become troubling evidence that every party involved rushed to complete the lucrative project at the expense of
The threat to the environment remains.
"We're just one hurricane away from seeing how bad things can get," said
Compton fears the state's handling of the situation has set a dangerous precedent for the two dozen other gypsum stacks in
Some also have expressed concerns over why the state would ever approve storing dredged materials in a gypsum stack -- which had never been done before in
Even after things started to go wrong, the DEP, HRK and
"Everybody needed to know about that first tear," said
The failure to obtain the required insurance by both
If HRK can't survive its bankruptcy,
"The provision they made for project insurance, like that which they required of the dredging contractor for general liability, pollution liability, vehicle liability and worker's compensation insurance, appear to be prudent requirements," DEP spokeswoman
Commissioners don't recall
The contract between
The policy also was to last 24 months after the final dredging was deposited in the stacks, a clause that could have provided financial relief for the future runoff threat that's still expected this fall.
The contract was signed by the port's then second vice chairman
Whitmore could not recall the document or any issues related to insurance.
"You have your legal counsel present it to you and your executive director reviews it," Whitmore said. "Hopefully staff followed procedures."
"I don't know anything about it," he said.
Current port officials also declined to comment, citing the pending litigation, and referred all inquiries to their attorneys at the
"We rely on our attorneys to ensure the contract provisions are met," he said. "Prior to us putting the first spoil at HRK, the attorney at the time should have reviewed the contract again ... That attorney will be held accountable."
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