Four environmental advocacy groups are allowed to intervene in a court settlement between the Energy and Environment Cabinet and Kentucky's two largest surface-mine coal producers, a Frankfort judge ruled Friday.
The state in December settled a lawsuit with Frasure Creek Mining and ICG of Hazard and Knott County over about 2,700 instances of bad record keeping and reporting of pollutants discharged into Kentucky rivers from mine sites.
Frasure Creek and ICG agreed to pay a total of $660,000 and to fix problems at labs contracted with testing the water for pollution.
The four environmental groups, which triggered the settlement in October by filing notice of intent to sue ICG and Frasure Creek under the federal Clean Water Act, said the state's investigation was weak and did not protect the citizens of Kentucky.
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The groups had reviewed two years' worth of pollution monitoring reports and alleged 20,000 instances of fraudulent reporting and overpollution.
The environmental groups said fines for the violations the state found could have reached $103 million.
"The Cabinet, by its own admission, has ignored these now admitted violations for years," Franklin Circuit Judge Phillip Shepherd wrote in his ruling. "The citizens who brought these violations to light through their own efforts have a right to be heard."
Shepherd ordered attorneys for the coal companies, the state and the environmentalists to mediation for a three-month period to examine the state's investigation.
He set a hearing date for June 14. The state, in its investigation, found no instances of fraud and characterized most of the violations as paperwork errors.
Gov. Steve Beshear called for a certification process to be put in place for laboratories that test mine discharge. "From what little we know, the cabinet didn't go far enough in its investigation," said attorney Mary Cromer of the Appalachian Citizens Law Center, representing the four groups: Appalachian Voices of North Carolina, Waterkeeper Alliance of New York, Kentucky Riverkeeper and Kentuckians for the Commonwealth.
The companies have said they are behaving responsibly. A spokesman for ICG said allegations of fraud are "patently false and ludicrous."
ICG and Frasure Creek, in the settlement with the state, agreed to bring their contracting water laboratories up to scratch or to switch labs.
The state opposed the environmental groups' motion to intervene in the settlement, saying their demands were an "unwarranted burden."
Environmental Protection Commissioner Bruce Scott said the cabinet is reviewing Shepherd's order.