Environmental Assesment, CELCO-ARAUCO, and Chile's

ETHICS IN SCIENCE AND ENVIRONMENTAL POLITICS 2006, 1–4 Published June 20 ESEP

EDITOR’S COMMENT

Environmental assessment, CELCO–ARAUCO, and Chile’s wetland sanctuary: ethical considerations

Brian M. Marcotte*, Co-Editor-in-Chief

Strategic Analysis, Inc., 401 Cumberland Avenue, Suite 1102, Portland, Maine 04101-2875, USA

The Carlos Anwandter Sanctuary in southern Chile environmental requirements, such as operating in was designated by Chile on 27 July 1981 as a wetland excess of permitted production levels, emissions in protected under the United Nations ‘Convention on excess of approved levels, using coolant waters to Wetlands of International Importance especially as dilute effluent and installing an unauthorized second Waterfowl Habitat’ signed in Ramsar, Iran (UNESCO outfall to the Rio Cruces (Tomat & Johnson 2005). 1971). The Sanctuary receives fresh water from the Rio Mulsow & Grandjean (2006) note that the environ- Cruces and the Rio Calle-Calle that mixes with Pacific mental impact study presented to the regional environ- seawater in a large estuary at the Bay of Corral. The mental regulatory body was drafted by CELCO-

Sanctuary is home to many species of migratory birds ARAUCO itself. SO4 was the only major chemical and to waterfowl such as the black-necked swan. compound that the pulp mill was known to release that On 18 April 1996, the Comisión Nacional del Medio was not subject to the environmental impact study Ambiente for Chilean Region X (COREMA) acccepted prior to the mill’s operation (Mulsow & Grandjean the environmental impact study drafted by the 2006; emphasis added). This raises the question of eth- Celulosa Arauco y Constitución (CELCO-ARAUCO) ical conduct by the Government of Chile and the own- and approved construction of a US $ 1 billion kraft- ers of the pulp mill. bleached type paper pulp mill on the Rio Cruces near There is a large body of scientific literature on the San Jose de la Mariquina (Santiago Times 1996). physics, chemistry and ecological effects of sulphate

COREMA’s approval was subject to 2 conditions: (1) a (SO4) and sulfuric acid (H2SO4) discharges from pulp company guarantee that hazardous waste would be mills. The effluent of the CELCO-ARAUCO mill has treated in an environmentally safe fashion (tertiary been correlated with loss of sub-aquatic plants such as treatment; Tomat & Johnson 2005) and, (2) a company Egeria densa, and the loss of these plants was deter- promise to develop a monitoring and follow-up plan mined to have caused the death and emigration of for its waste products (Santiago Times 1996). At that black-necked swans that had taken refuge in the Sanc- time, CELCO-ARAUCO assured the regional gover- tuary (UACH 2004, 2005). nor, Rabindranath Quintero, that ‘it will have no prob- Mulsow & Grandjean (2006) show that the loss of the lem in fulfilling the new requirements’ (Santiago plants was caused by SO4 in the mill’s effluent. The Times 1996). SO4 caused loss of calcium bicarbonate, Ca(HCO3)2, Since the mill began full operations in February from which the plants extract CO2 for photosynthesis. 2004, it has faced repeated complaints from the public Without this source of CO2, the plants lost turgor, concerning noise, noxious odors and water pollution turned brown and died. (Tomat & Johnson 2005) and from eco-tourism busi- The chemistry of sulfuric acid has been studied nesses associated with the Sanctuary concerned with since the 16th century. The chemistry of ionic replace- the loss of black-necked swans and other wildlife ment reactions, oxidation-reduction reactions, ion

(Langman 2005). These complaints resulted in judg- exchanges and the effect of anions like SO4 on calcium ments against the mill, and CELCO-ARAUCO was bicarbonate buffers has been well understood for over required to pay fines and reparations. The mill was 100 yr. The physiological need of C4 plants for carbon also closed several times for non-compliance with dioxide concentrating mechanisms (CCM), and the use

of calcium bicarbonate by CCM’s to enhance CO2 other industrial applications to improve everyone’s concentrations in their local environment, was estab- business activity and profit? lished in broad outline almost 30 yr ago. Therefore, the Pulp and paper production is a major source of ecosystem effects reported by Mulsow & Grandjean income for Chile (Neira et al. 2002, World Resources (2006) were predictable to a reasonable degree of sci- Institute 2005). The pulp mill in question is operated by entific certainty well before the design and construc- Celulosa Arauco y Constitución (CELCO), a subsidiary tion of the CELCO-ARAUCO pulp mill. The damage to of the Chilean multinational timber company Forestal the Carlos Anwandter Sanctuary resulting from the Arauco, one of the world’s 10 largest pulp producers. release of pulp mill effluents into the headwaters of the 99.98% of Forestal Arauco is owned by Empresas Sanctuary was predictable and preventable either by Copec, of which 60.11 % is owned by AntarChile S.A., non-aquatic disposal or treatment of effluent (see a company that in 2005 held its corporate meeting at below). CELCO headquarters, 150 El Golf Avenue, Santiago,

There may be short-term responses to the SO4 pollu- Las Condes County, Metropolitan Region, Chile (SEC tion released by the CELCO-ARAUCO pulp mill. For 2005a). In its United States Securities and Exchange example, one of the peer reviewers for the paper by Commission 6-K statement, dated May 2005 (SEC Mulsow & Grandjean (2005) suggested simply adding 2005a), AntarChile’s President was Alberto Etche- calcium bicarbonate in the proper proportions to the garay Aubry and its voting Directors were Eduardo mill’s effluent to neutralize the effects of the sulfates Navarro Beltrán (Empresas Copec S.A.: 113 127 452 and sulfuric acid on the Sanctuary. A well-designed shares), Manuel E. Besanilla Urrutia (Chilur S.A.: study of such a short-term response could be done 24 746 shares) and José Tomás Guzmán Dumas immediately. (AntarChile S.A.: 95 shares). Edmundo Ernst Vallette Long-term responses, however, may be more prof- acted as Secretary. AntarChile is managed by Jorge itable for the company and more ecologically responsi- Andueza Fouque (Forbes 2006). ble. For example, waste from the mill might be used as The 2005 revenue of AntarChile was US $7.25 bil- a resource by other industries and manufacturers, as lion, with a net profit margin of 8.19% (Forbes 2006, modeled by McNeil et al. (2005). A survey of Internet SEC 2005a). Further, CELCO-ARAUCO stated in its resources shows that sulfuric acid is cleaned and re- 25 June 2005 filings with the US Securities and cycled in the semiconductor industry. Why not at the Exchange Commission regarding legal proceedings CELCO-ARAUCO pulp mill? Sulfuric acid is used as a against the company that, ‘We have determined that dehydrating reagent in organic chemical and petro- the suspension of operations at the Valdivia Mill chemical processes involving reactions such as nitra- resulted in a loss of sales of approximately US $1 mil- tion, condensation and dehydration; in the manufac- lion per day and a loss of profit of approximately ture of fertilizers, glue, dyestuffs and explosives; in the US $250 000 per day (SEC 2005b) — a profit margin of oil refining industry for alkylation and purification of 25 % for this mill alone. crude oil distillates; in the inorganic chemical industry, The owners of the CEOCO-ARAUCO pulp mill and notably in the production of TiO2 pigments, hydrochlo- its parent corporation AntarChile could have profited ric acid and hydrofluoric acid; in the metal processing greatly from an imaginative environmental impact industry, for pickling and de-scaling steel, leaching study for the sulfate and sulfuric acid wastes their copper, extracting nickel and in the preparation of pulp mill produces, but they neglected to conduct electrolytic mats for non-ferrous metal purification and such a study. Were the Government and company plating; and in leather tanning, for sulfonation in deter- officials, including the individuals who own and oper- gent production and for organic sulfonation in the pro- ate the parent corporations, ignorant of the pre- duction of pharmaceuticals. dictable effects of the mill’s effluent? Why was the Sulphates like those released by the CELCO- mill operated in blatant disregard of promises made to ARAUCO pulp mill are used in production of fertilizers the regional regulatory officials and governor? Why and fertilizer trace elements, in fermentation, in fire was the mill operated in violation of production and proofing, in manufacture of viscose rayon and in food emission limits? Were the owners grossly negligent? additives. Did the owners not know an unlawful second outflow With all these possible uses for the chemicals in the for their company’s wastes had been built? Were their effluent of the CELCO-ARAUCO pulp mill, using the actions simply venal? Did CELCO-ARAUCO have to Rio Cruces and the Carlos Anwandter Sanctuary as a use the headwaters of the Carlos Anwandter Sanctu- free corporate sewer lacks imagination and, worse, ary to dump their wastes, given that the mill has a seems to constitute gross negligence for the operators profit margin of 25% (SEC 2005b) and the parent cor- of a publicly traded company. Could not the CELCO- poration has a net profit of 8.19% (Forbes 2006, SEC ARAUCO mill be ‘married’ to one or more of these 2005a) — both profit margins far above current bond Marcotte: Editor’s Comment 3

yields? Are the owners of AntarChile so avaricious Copec and AntarChile dishonored themselves, their that a few tenths of a percent of profit could not be family names and their employees by not operating spent in treating or recycling the contents of the mill’s the mill as they had promised. effluent to save a Sanctuary? 6.Because the word of the owners of CELCO- Plainly, government officials and corporate owners ARAUCO can no longer be trusted, the company have not acted honorably in this matter, and their must be forced to operate the mill within permissible unethical conduct has resulted in great damage to a production and emission limits by paying the gov- Sanctuary of international importance. The people ernment of Chile to position enforcement agents residing in the affected area have had the quality of directly in the mill. Further, employees of CELCO- their lives and livelihoods degraded. ARAUCO must be taught the laws, regulations and Science speaks truly if certain rules are followed by special restrictions and/or promises under which the regulators, assessors, enforcers and company owners. mill operates at the owners’ expense. The educated 1.Science can only disprove null hypotheses. In the employees then must be called upon publicly to dis- case of environmental development, the null hypoth- close activities at the mill that violate these laws, reg- esis is, ‘The development is not safe for the environ- ulations, restrictions and promises. No retribution ment.’ Environmental impact assessments attempt to against these whistle blowers can be tolerated. Thus, disprove this null hypothesis. employees must self-regulate and refuse to under- 2.Assessment must be entirely separate from regula- take work that is illegal or contrary to regulation, tion, from enforcement and from business interests. restrictions or promise. Regulators, enforcers and developers cannot have a 7.Developers like government regulators and say, directly or indirectly, in the choice of assessment enforcers must think through the predictable conse- provider or in the final decisions concerning the vari- quences of polluting an environment such as the Rio ables to be measured or the methods to be used to Cruces and the Carlos Anwandter Sanctuary, and conduct the study. These are matters for scientists those consequences should be proportionate to the alone. Accordingly, assessment requires a separate damage done and to the economic size of the busi- governing body composed of disinterested scientists. ness. Large companies, especially dishonored ones If an assessment required by this body is too expen- like CELCO-ARAUCO, must pay more to feel the sive for the developer, either the government assists economic consequences of their wrongdoings. Thus, because of the expected value of the development or fines and reparations must not be fixed sums as a the assessment is not done and the development matter of law and regulation. does not occur. This principle also applies to assess- 8.Finally, in a time of rapid climate change and rising ing the safety and effectiveness of, for example, sea levels, high elevation lands with drainage basins drugs (e.g. Angell 2004, 2006), cosmetics, food addi- that capture potentially drinkable water, must be tives, seafood harvest areas, fisheries and fisheries understood as held in trust for the future survival, not technologies. simple enjoyment, of human kind. No landowner 3.There must be no conflicts of interest — financial, should be allowed to diminish the future of human political, or those caused by personal bias either survival by polluting or despoiling such lands and favorable or unfavorable — among the regulators, drainage basins. environmental assessors, or enforcers. Had these simple principles been followed in the 4.Developers, regulators and impact assessors must present case, a better and more profitable future might view development in a comprehensive way. Eco- have been imagined and implemented for the paper nomic development and environmental protection industry and the residents of San Jose de la Mariquina, can be made one through the use of one company’s Valdivia and their environs. waste as a resource for another or others. Thus, business models may be nested within business models LITERATURE CITED to optimize resources and minimize waste. Develop- ers must conceive of environmental impact assess- Angell M (2004) The truth about the drug companies. Ran- ments as an opportunity to improve their business dom House, New York model as well as protect the environment. They must Angell M (2006) Your dangerous drugstore. The New York Review of Books 53 (10) Available at: www.nybooks.com/ be open to the possibility of better, perhaps nested, articles/19055 business models. Forbes (2006) Forbes 2000: AntarChile S. A. Available at: 5.Owners of developments must keep their promises, www.forbes.com/lists/2006/18/2044619.html must honor their oaths and abide by their freely Langman J (2005) Fighting for Chile’s swans. Available at: www.chiletravel.com/chile/publish/article_434.html offered word. The owners of Celulosa Arauco y McNeill J, Grant RG, van der Meulen A (2005) Integrated Constitución (CELCO), Forestal Arauco, Empresas biosystems for resource conservation in rural industries: 4 ESEP 2006: 1–4

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