O'Neill, Alcoa and the Environment
by Terje Langeland

For centuries, the Mohawks of Akwesasne--an area straddling the border between present-day New York State and Canada--depended on the bounties of the St. Lawrence River for their livelihood. The river was central to their communal economy based on fishing, hunting, trapping and farming.

"Water is life," declares the Mohawks' traditional Thanksgiving Address.

But the address is tinged with a bitter irony now. For much of the 20th century, three large industrial plants near the reservation used the St. Lawrence as an open sewer, contaminating the water with a cocktail of toxic chemicals.

The river ecosystem became so contaminated with polychlorinated biphenyls (PCBs) that, since 1986, Mohawks have been advised to eat only minimal amount of river fish. Their traditional economy has collapsed. Their entire culture has become threatened as a result.

"It's catastrophic," said Henry Lickers, director of the Mohawk Council of Akwesasne's Department of the Environment. "Farming, trapping, fishing was the traditional economy that kept the community integrated." Mohawk cattle farming had already been devastated by fluoride contamination from a nearby Reynolds Metals plant.

One of the three companies that have poisoned the St. Lawrence is Alcoa Inc., a global corporation that operates 228 facilities in 32 countries--including an aluminum smelter at Massena, upstream from Akwesasne.

Alcoa's millionaire chairman and former CEO, Paul O'Neill, now serves as "Secretary of the Treasury" under "President" George W. Bush. O'Neill worked in the Office of Management and Budget from 1967 to 1977 and spent the following decade as vice president and president of International Paper--another global corporation with a history of environmental violations.

O'Neill joined Alcoa as chairman and CEO in 1987. During his 11-year stint as CEO, O'Neill almost doubled Alcoa's profits from $7.8 billion to $16 billion. But critics note that, under O`Neill`s command, the Pittsburgh-based multinational boosted its profits by "socializing" its costs.

As the world's leading aluminum producer, critics point to Alcoa as a classic example of a highly resource-intensive industry that has benefited from taxpayer subsidies while causing environmental destruction around the globe.

From New York to Suriname to Brazil to Australia, indigenous and tribal peoples have complained of paying the price for Alcoa's success.

The World Bank has been an essential partner in Alcoa's worldwide expansion. The Bank, which helps finance development projects, has come under growing criticism for ignoring the impacts on human rights and the environment.

As the country's senior economic policymaker, O'Neill would have significant influence over the policies and practices of the World Bank and other global financial institutions. His longtime association with Alcoa is a source of concern for those who would like to see such institutions pay more attention to human and ecological concerns and less attention to corporate profits.

"It's not a small matter that a corporate person like that is moving into the Secretary of the Treasury slot," said Rudolph Ryser of the Center for World Indigenous Studies, a think-tank in Olympia, Washington. "The World Bank plays a direct role in the construction and really the expansion of transnational corporations, of which Alcoa is one."

When O'Neill's nomination was announced, Alcoa issued a press release that lauded the former CEO's "deep-seated devotion to social and environmental responsibility."

Alcoa's public relations office did not respond to questions regarding the company's global environmental track record, but faxed a laundry list of safety and environmental awards as evidence of the company's "longstanding commitment to environmental safety, and plant health and safety."

But the list of Alcoa's environmental violations is perhaps equally impressive. More than 47 Alcoa facilities have been cited by state and federal anti-pollution regulators since 1987. Last March, Alcoa agreed to an $8.8-million settlement with the EPA after being charged with illegally discharging inadequately treated wastewater into the Ohio River. In September, an Alcoa subsidiary in Port Allen, Louisiana, pleaded guilty to similar discharge violations and agreed to pay more than $1 million in fines.

In Texas, a citizens group called Neighbors for Neighbors is fighting an Alcoa proposal for a vast stripmine northeast of Austin that would provide coal to fuel in the company's Rockdale smelter. The group says the mine would destroy wildlife habitat, force local residents to move and could dry up a local aquifer as groundwater is pumped out to prevent the mine from flooding.

"On their national website, they pledge their commitment to operating in a manner that's environmentally sound," said Travis Brown, a local activist. "But when it comes to the bottom line, you know, that's what wins out."

During George W. Bush's tenure as governor of Texas, activists repeatedly asked him to stop Alcoa's stripmining scheme. But Bush was unresponsive.

"When we heard that Paul O'Neill was being named [as Treasury Secretary], we kind of thought, 'Well, maybe that explains partly why we were getting the cold shoulder from Governor Bush'," Brown said. "Obviously, he's had some kind of relationship with him for some time."

Over the past several decades, PCBs and other pollutants have made their way into the St. Lawrence not only from Alcoa's Massena plant but also from a nearby General Motors plant.

PCBs, synthetic industrial chemicals that are toxic to both human health and the environment, were banned in 1978. Nonetheless, as recently as 1990, PCBs from Alcoa were still making their way into the Grasse River, a tributary of the St. Lawrence.

Alcoa has been under an EPA order to clean up its Grasse River pollution since 1989. In 1991, Alcoa agreed to pay a criminal fine of $3.75 million and a civil penalty of the same amount for discharge violations at Massena. It was, at the time, the largest ever criminal penalty for hazardous-waste violations. The three companies have since carried out dredging and other clean-up measures, but the Mohawks say much more remains to be done.

"They didn't do that good of a job, and they've just been dragging their feet," charged Mary Arquette, an investigator for the environmental justice program of the Akwesasne Task Force on the Environment.

One 1992 study showed increased levels of PCBs in the breastmilk of Mohawk women. The change in diets since the fish advisory has led to "skyrocketing" levels of diabetes in Akwesasne's population. Besides losing one of their primary food sources, Mohawks also lost the ability to make a living from commercial fishing, once a lucrative local industry.

With the traditional communal economy collapsing, entrepreneurial economies--including gambling and smuggling--began "edging their way in." A 1990 controversy over whether to allow casino gambling on the reservation led to a violent conflict. Today a casino sits on Mohawk land, but it's losing money.

Twenty-five years ago, Lickers estimates, some 75 percent of the Akwesasne people spoke their native language. Now, he said, it's closer to 35 percent. Lickers blames the decline of traditional activities such as fishing. A lot of language is tied up in how we speak about the environment," he explains.

The Mohawks' story is not unique. In 1963, Suralco--an Alcoa subsidiary--constructed the Afobaka Dam in Suriname to power a smelter in the town of Paranam.

According to the World Rainforest Movement's Forest Peoples Program (FPP), the dam inundated some 600 square-miles of tropical forest and forced the relocation of approximately 6,000 Maroons--descendants of escaped African slaves who now live a tribal lifestyle in the rainforest. The Maroons were each paid the equivalent of $3 in compensation.

In 1998, Wilma Prika, a village leader from Adjoemakondre, wrote Suriname President Jules Wijdenbosch, asking the government to suspend Suralco's bauxite mining operations and to provide compensation for the damage.

"Our agricultural plots and houses have been destroyed, without any compensation," Prika declared. "Our river has been polluted so badly we can no longer use it. Wastes from the mining operation run downhill through the village into the river, turning it an orange-brown color. Health problems have occurred from villagers using the river water. Use of dynamite by the company causes noise pollution and has contributed to the loss of game animals we use for food."

The intrusion of Alcoa and other mining companies has led to "epidemic levels" of malaria, violence, prostitution, drug smuggling and environmental destruction, the FPP reports.

President Wijdenbosch reportedly wants to expand bauxite mining in western Suriname through a comprehensive investment program involving Alcoa and the World Bank. The mining would affect indigenous Carib and Arawak populations and would "require clearing of vast areas of pristine tropical rainforest," the FPP stated.

In 1984, the Brazilian government completed construction of the Tucurui Dam on the Tocantins River in the Amazon basin. About one-third of the dam's electricity was set aside for aluminum producers, including a combined refinery and smelter on Sao Luis Island, in which Alcoa holds the majority interest.

"The dam's construction flooded 243,000 hectares (938 square miles), including six towns and two Indian reserves," Kenny Bruno and Jed Greer reported in the 1996 book Greenwash. Bruno and Greer reported that the deforestation from dam construction "has threatened the habitat and existence of many plants and animals--especially marine animals such as fish, dolphins, turtles, manatees, and caimans."

Approximately 20,000 people were evicted from Sao Luis Island to make way for an expansion of the aluminum production facilities. Many peasant families and indigenous people who were forced to relocate never received compensation.

In 1995, Alcoa joined a partnership to build another Brazilian dam, the Machadinho. This dam, now under construction, will displace more than 9,000 people and flood 7,700 hectares (30 square miles) of mostly forested land. According to Environmental Defense, the project expects to receive financing from the World Bank.

Since most large development projects around the world are formally promoted by national and state governments, global corporations have a certain "deniability" when it comes to the responsibility for impacts on local populations.

"What they do is they leave it up to the state governments to regulate and control relationships with the indigenous populations," Ryser said. "So they can stand back and say they really had nothing to do with that....This is the standard approach of virtually any corporation. Where there's a potential conflict, it becomes the problem of the state to regulate and maintain stability and to protect the interests of the corporation."

A report by the World Commission on Dams (WCD)--an independent body sponsored by the World Bank itself--estimates that over the past 50 years the bank has provided $75 billion for 538 large dams in 92 countries, which have forcibly displaced at a total of at least 10 million people in addition to causing environmental damage.

The WCD recommended that no more dams be built without the agreement of the affected people and that "mechanisms should be developed to provide social reparations for those who are suffering the impacts of dams, and to restore ecosystems."

Ryser believes the World Bank needs to change its current policy on indigenous people, which officially aims to "mitigate" the impact of development projects. Rather than giving indigenous groups a say in whether development should take place, the mitigation measures tend to focus on giving them money, material goods and facilities, such as schools and health clinics. Ryser says the policy's objective is to "monetize" traditionally self-sufficient indigenous groups thereby fostering a dependency on goods and services "so that they no longer resist development."

"The Secretary of the Treasury has tremendous influence in World Bank and IMF transactions," Ryser said. "In both of those institutions, the main stockholder is the United States--which means that the US designates most of the directors. And it is the Secretary of the Treasury who plays the primary role in identifying the people who are going to be in those slots. So you, in effect, determine global economic financial policy out of the Treasury Department."

But with a former CEO of Alcoa serving as secretary of the treasury, the hope for change may be dim, Ryser conceded.

Meanwhile, back at Akwesasne, Lickers said O'Neill is welcome any time he wants to help the Mohawks. Noting that the Treasury Department runs the US Customs Service, he said maybe O'Neill could help address the local smuggling problem.

When asked for her reaction to O'Neill's appointment, Arquette had just one comment: "I hope he's better at economics than he is at environmental cleanup."

© Earth Island Journal, Summer 2001

 

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