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Italy

Italy

Italian wind sector not corrupt, says report

ITALY: The vast majority of companies operating in Italy's wind industry are law-abiding, Italian environmental association Legambiente indicates in a report looking at illicit activities in the sector. Legambiente notes that its report, published in August, was designed to set the record straight after months of media reports closely associated the country's wind business with criminal activity.

"The numbers seem to refute the accusations which have circulated in these months concerning the level of penetration of criminal activity in this sector," says the association. The Legambiente report identifies seven major investigations carried out since 2006 looking into illicit activity in the wind sector, including one that recently resulted in assets being seized, with more than 40 wind and photovoltaic businesses among them.

The investigations uncovered criminal or suspected criminal activities in the Italian regions of Sardinia, Sicily, Campania, Apulia and Calabria.

"Yet, despite the invasive presence in these regions of mafia-type organisations and the obvious interests of those who look for every useful occasion to illegally make a profit, wind is by far the economic sector least conditioned by criminal phenomena and illegal activity in general," the Legambiente report finds.

It adds that the vigilance of magistrates in investigating illicit activities in the wind industry had meant that there is practically not a trace of illegal wind energy in the country's electricity system.

The report notes that wind farm developers receive no EU or Italian government funding to build wind farms. Instead, Italian wind farm owners receive their income from the sale of the electricity that is actually produced, and through the sale of green certificates.

Green certificates, in turn, are issued for every MWh of electricity produced. This means that there is absolutely no economic interest for investors to construct wind farms whose turbines are not turning.

Remaining vigilant

At the same time, Legambiente stresses that it is important for the industry not to lower its guard. It cautions that the risks of criminal infiltration or illegal activity could increase as the country's wind business continues to grow.

It points to grey areas that exist in some regions in both the authorisation process and the identification and availability of suitable wind farm sites. "The system of rules and checks must be reinforced, together with the activity of prevention and repression on the part of law enforcement and magistrates," states the report.

Edoardo Zanchini, head of energy at Legambiente, says there is the risk that criminal organisations may try to intervene in the construction phase of wind farm projects in some areas of Sicily, Calabria and other southern Italian regions. In particular, they may ask for protection money or seek to involve companies linked to organised crime with the construction process.

He advises that project promoters can protect themselves by maintaining close contact with law enforcement authorities and asking the public prosecutor's office to guarantee that firms working on a project are legitimate. Many companies active in regions where organised crime is a problem say that is part of standard operating procedure.

Simple checks

At the same time, many wind farm developers and operators active in Italy believe it is possible to avoid wind farm projects that have been tainted by criminal involvement. One project manager at an Italian developer, who declined to be named, notes that banks providing project financing loans carry out extensive due diligence, which provides one major filter to help ensure projects are above-board. "You have to avoid looking for shortcuts both in the authorisation process - which can be a lengthy one - and in the construction phase," he adds. "If you follow that principle you can't be corrupted."

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