US Update

US Update

12th November 2006

Asarco leaves costly environmental mess in the city

Residents were promised nature preserve, but the company is now bankrupt

By Dan Kelley Caller-Times

http://www.caller.com/ccct/local_news/article/0,1641,CCCT_811_5138702,00.html

Ruth Einkauf and her Dona Park neighbors were promised a 30-acre nature preserve behind her home in 1999 as part of an Environmental Protection Agency settlement with a nearby recycling plant.

Before the settlement, announced as part of an enforcement action by the state and federal governments, she and neighbors tended the area. Now, weeds and tall grass on the lot provide cover for varmints that invade Einkauf's home.

It is unclear if the project ever will be completed. Dona Park residents are neighbors to one of the largest bankruptcies in the country, a vast and tangled affair that encompasses century-old mining giant Asarco and its subsidiary Encycle Texas.

"I really thought they'd do what they promised," said Zilma Champion, who lives nearby.

Tom Aldrich, vice president for environmental affairs at Asarco, said the company established a conservation trust at the 30-acre parcel and performed some environmental studies as a prelude to building the park. It has not built the walkways nor planted the promised vegetation that was required. With the company in bankruptcy, the future of that conservation trust is murky.

"We do not intend to put those walkways in at this time," Aldrich said.

Neighbors of other Asarco plants across Texas have yet to see more than $1.75 million in supplemental environmental projects - plans approved by the government as part of settlement agreements.

"The dilemma with Asarco has been that there's been no cleanup in any areas listed in the settlement," said Neil Carman, Clean Air Program director of the Lone Star Chapter of the Sierra Club. "They are skirting their commitment."

Other Encycle supplemental environmental projects include:

$1.8 million to pave a road in El Paso;

$260,000 to restore a four-acre wetland near Coy Mines in Knoxville, Tenn.;

Asarco's bankruptcy threatens an estimated $1.3 billion in environmental cleanups across the country, according to U.S. Justice Department claims. Asarco's parent company Grupo Mexico established a $100 million trust for all of the those cleanups as a condition of being allowed to transfer ownership of copper mines in Peru.

The local project is about 40 percent complete.

The faltering pace of the construction of the nature preserve isn't the first time the neighborhood has tangled with its industrial neighbors.

About a decade ago, tests in Dona Park and another nearby neighborhood, Manchester Place, showed high levels of soil contamination.

State and federal agencies investigated. Neighbors filed suit alleging that a former copper company that operated nearby from 1942 until about 1982, when the plant shut, spewed heavy metals into the air. The matter was later settled out of court.

Asarco reopened the plant in 1984, and it sputtered along until 1985, when it was shuttered again. In 1989, Asarco again reopened the facility in a recycling project through a subsidiary called Encycle Texas. Encycle became ensnared in a government investigation into what regulators referred to as "sham recycling," resulting in a formal settlement with the state and federal governments. The company agreed to build a 30-acre nature preserve behind Einkauf's house in 1999 to settle the legal proceedings with the government.

There is also a question of whether taxpayers could end up paying for some of the cleanups through the Superfund program, according to the EPA. With Asarco in bankruptcy, other companies, including suppliers to the plant and successor corporations, face claims under broad liability provisions in EPA rules.

Encycle Texas sought protection under Chapter 11 of the bankruptcy code to reorganize in August 2005. It was later forced into Chapter 7 bankruptcy and is now undergoing liquidation.

The bankruptcy trustee overseeing that liquidation, Michael Boudloche, said the Encycle plant at 5500 Up River Road is for sale and has applied for The Texas Commission on Environmental Quality voluntary cleanup program. Total remediation costs are uncertain, with estimates from $2 million to $20 million. Consultants have been hired to calculate the total environmental costs.

That settlement also ignited controversy recently, when environmentalists in El Paso uncovered an EPA memo to the Justice Department detailing what regulators referred to as the "sham recycling" enterprise in which hazardous waste was trucked from Corpus Christi to El Paso for smelting. Though the settlement was announced, neighbors in Corpus Christi and El Paso were never informed of the claims.

The company claims there is nothing new to those allegations.