PERU: As government deadline looms for clean-up of one of world's most polluted sites Doe Run Peru union workers demand President Garcia save their jobs

Record ID: 216893

  • Title: PERU: As government deadline looms for clean-up of one of world's most polluted sites Doe Run Peru union workers demand President Garcia save their jobs
  • Date: 28th August 2009
  • Summary: VARIOUS OF LA OROYA RESIDENTS WAITING TO RECEIVE MEDICAL ATTENTION FOR THEIR CHILDREN BOY WITH RESPIRATORY PROBLEMS COUGHING / COVERING MOUTH GIRL RECEIVING CHECK-UP FOR RESPIRATORY PROBLEMS (SOUNDBITE) (Spanish) LA OROYA RESIDENT, MELITON RIVERA, , SAYING: "Last year we had a blood test at the Health Ministry and the results showed high levels of contamination in our
  • Embargoed: 12th September 2009 13:00
  • Keywords:
  • Location: Peru
  • Country: Peru
  • Topics: Environment / Natural World,Domestic Politics
  • Reuters ID: LVA99ROQ49XZEITUXH8PPX0C1NEL
  • Story Text: As government deadline looms for the clean-up of one of world's most polluted sites, workers at the Doe Run Peru smelter demand an extension over fears of job losses.
    Thousands of workers in La Oroya, a ramshackle town 12,300 feet in the Andes (3,700 m) where thin air and toxic fumes make breathing a chore, are demanding President Alan Garcia save their jobs at Doe Run Peru's smelter.
    Union members plan to blockade highways across central Peru starting next Monday (August 31) unless the government extends a deadline requiring Doe Run to finish an environmental cleanup program by October.
    Doe Run's plant, which opened in 1922, is the main source of pollution in a town long ranked as one of the 10 most contaminated places on earth. Many townspeople have high levels of lead and arsenic in their blood.
    Operations at Doe Run Peru began unraveling in October as commodities prices tumbled 70 percent on the global economic downturn and banks cancelled its credit lines. By June its furnaces shut.
    Now, the future of the world's most diversified metals smelter, a contentious environmental cleanup, and 20,000 jobs hinge on a political tussle between Peruvian President Alan Garcia and Ira Rennert, the reclusive New York billionaire who owns Doe Run Peru.
    "Us workers are extremely worried mainly about our families, our children because we've been enduring this chaotic problem for the past six months. We've been paralyzed since August 1," said Roberto Guzman, the General Secretary of La Oroya's Metallurgical Workers' Union.
    "If the government does not extend PAMA (an environmental cleanup programme) this would automatically create a social collapse at La Oroya. If smelting is not activated, you'll see operations at La Oroya grinding to a complete halt," added Guzman.
    Since buying the plant from Peru's government in 1997, Doe Run Peru says it has slashed lead and arsenic emissions into the air, and industrial water discharges into a nearby river, by about 80 percent.
    Still, after years of 87 years of pollution, residents are distrustful.
    "Last year we had a blood test at the Health Ministry and the results showed high levels of contamination in our bodies, that is why we want more tests. They want us to think there is no contamination here in La Oroya but it has stayed with us. Here are my test results and those of my four sons," said forty-two-year-old Meliton Rivera, who lives across the river from the plant. Two of his four kids have elevated amounts of lead and arsenic in their blood and are slow learners.
    In a bid to save cash, the company halted spending in December on the last phase of its environmental cleanup program, which aims to further cut smokestack emissions.
    Its smelter eventually ground to a halt after more than $110 million bills it owes mining companies piled up and it ran out of cash to buy mineral concentrates that it refines.
    To reopen, it needs a cash infusion from its owner or a loan from a bank, yet neither will put up money until the government extends the cleanup deadline.
    The government has so far refused to grant an extension, saying it will only give Doe Run more time if it puts 100 percent of its shares in escrow as a guarantee that it will finish the job.
    That has created a stalemate, with the company and workers aligning to push the government to be flexible, and even local residents who have complained about pollution for years saying their main economic engine needs to restart.
    Doe Run says it would need a 30-month extension to build and pay for a sulfur dioxide capture system for its copper plant, or half that time if it gets a bank loan.
    "We don't want the plant to close, it should stay open, but we also don't want pollution," said forty-year-old Monica Ayala, who lives in front of the smelter and says her three children sometimes cough up dark soot from it.
    For miles around the plant, high levels of lead can be found 4-5 inches (10-12 cm) into the topsoil. Children are exposed to it when they play in the dirt, while chickens and lambs people raise in their backyards ingest it.
    The government is responsible for cleaning up contamination that was emitted before Doe Run bought the plant and now rests on walls of the narrow canyon surrounding the town.
    And the company, which has spent $307 million on remediating and needs to spend $150 million more, blames the government for dragging its feet on its own cleanup.
    "The solution is to extend PAMA (an environmental cleanup programme). We're demanding investment over 30 months to be able to carry out PAMA, if we do it with our own money, but if we do it by financed means, that time could be reduced by between 15 to 18 months," said Doe Run Peru Vice President, Jose Bengoa.
    Getting the suppliers to contribute with mineral concentrates would also be necessary to start operations said Mines Vice President, Fernando Gala.
    "We maintain our position that in order to reach a final agreement we're not just talking about extending PAMA (an environmental cleanup programme). If we have the resources to carry out PAMA, if it's possible but then if suppliers don't provide minerals, it won't matter whether PAMA is extended or not," he said.
    As the impasse over the extension drags on, President Alan Garcia has faced muted calls to nationalize the company, though doing so would clash with his fervently pro-market policies.
    He has criticized left-wing leaders in Venezuela and Bolivia for taking over companies, a move that would saddle Peru with more environmental liabilities.
    For Garcia, whose popularity is below 30 percent and is facing a sharp economic slowdown, giving Doe Run an extension would anger environmentalists.
    And granting it a financial bailout would lead to accusations he is being too nice to Rennert, who owns of the largest houses in the United States -- a 66,000 thousand square foot mansion in the Hamptons.
    Meanwhile, Rennert has rebuffed requests to inject more money into Doe Run Peru.
    When he bought it, he agreed to forgo taking profits out of the smelter until meeting all environmental compliance rules. And company officials say that before the boom times of 2006 and 2007, the smelter lost money for years as it updated archaic equipment.
    And even after the plant finishes its cleanup, the hills of La Oroya will still be contaminated.
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