By Morten Rønning
Kværner will be in charge of project management, engineering, procurement, construction management, and start-up assistance for the smelter in Peru. Kværner's contract is worth approximately 120 million US dollars. Kværner is engaged on a cost reimbursable fixed fee basis. The costs of the modernisation will amount to 835 million USD in total. But the local population, who has worked to diminish the negative environmental effects of the smelter for years, is not satisfied with the plans.
Vice president corporate communications Marit Ytreeide in Kværner points out that their deliveries for the smelter contribute to a more environment-friendly running of the factory.
Southern Peru Copper Corp. is the largest mining corporation in Peru, and among the ten largest in the world. For 40 years, the company has extracted copper from the open-cast mines Cuajone and Toqupala in the southern part of the country. The copper is fused in the company's smelting works in the town Ilo on the Pacific coast. In 1997, the company accounted for 12% of the country's import revenues. The major shareholder in the company is the American company ASARCO. In spite of the large revenues the company makes for the country, the local population has to pay a high price. According to the local organisation Labor, the Locumba river, as well as almost ten kilometres of beach north of the town Ilo, and almost ten kilometres of beach by the town Ite, have been ruined by pollution. In Ilo, the company contributes to severe air pollution, which has turned the town into one of the world's most polluted.
Labor's main objection to the Environmental Impact Assessment of the extension, which was approved in November, is that it only covers a part of the project, the smelter, and not the extension of the Cuajone mine. Furthermore, the analysis has not assessed alternative solutions for the extension, and does not discuss the possibilities of repairing the environmental damages after the mining is finished.
In addition, the local population was not informed or invited to participate in the process, before the analysis was presented to the Ministry of Mining and Energy, according to Labor, which works to have the analysis rendered invalid.
In 1993 the mayor of the town Tacna, south of Ilo, took the company to court because of hazardous effluents and storage of industrial waste, and emissions into the air from the coppersmelter. The compensation claim was 100 million US dollars. The case has still not been tried by the Peruvian judicial system.
In 1995, 698 inhabitants from Ilo took SPL's owners in the USA to court in Corpus Christi in Texas. The reasons for the lawsuit were health hazards and damages to real property. More specifically: annual effluents of 29,000 tonnes of non-processed copper and other heavy metals into the Ite bay have killed fish and other aquatic life in an area of 160 square kilometres. Illegal effluents have killed off 21 kilometres of the Locumba river and 200 hectares of adjacent, arable land.
The company's illegal emissions of SO2 into the air are responsible for an increased rate of mortality due to difficulty in breathing among the local population. In addition, the company is accused of illegal disposal of waste on the beaches, and of taking out 53.6 million cubic metres of water which was supposed to cover the needs, among other things in agriculture, for 500,000 people in the area.
This lawsuit has been put on ice in Texas for the time being, because Peruvian authorities have asked to have the case transferred to the home country.
Even the workers are dissatisfied with the conditions at SPL. In 1996, 800 former employees took the company to court, claiming shares for the workers and percentages of the company's profits. Later that year 64 similar lawsuits followed. Similar claims were refused by the Peruvian judicial system in 1995.
"As you certainly understand, another supplier would have delivered the equipment if Kværner had decided not to."
Vice president corporate communications Marit Ytreeide in Kværner.
The Water Tribunal
The local population and the politicians in Ilo took the problems related to SPL to the International Water Tribunal as early as 1992. The tribunal is an independent institution that organises international hearings on water control. The tribunal gave a judgement, which clearly says that the local population's health and access to clean water have been suffering as a consequence of the company's use of water. The tribunal points out that the company has taken advantage of the evasive attitude of the Peruvian authorities towards the lawsuits of the local population, and that the company must improve their plant to bring it into accordance with national and international regulations. The company informed the tribunal that the accusations of the inhabitants in Ilo were false, and did not meet for the hearing in Amsterdam.
Through a comprehensive agreement with the authorities in 1991, the company was instructed to carry out extensive environmental improvements. In return, the company was promised that they would not be discriminated against in relation to other mining companies in the country. This agreement was part of the work towards the final extension of the plant, which was started in 1998.
As the company is now extending their activity with a new plant with the capacity of 1.25 million tonnes of concentrate per year, the local population once again feel that they are the ones who have to pay the price. As part of the extension, SPL launched the project "Control de Avenidas del Rio Torata" last summer.
This project is part of the extension of the Cuajone mine, and it aims to change the course of the river over a stretch of almost ten kilometres. The plan is to use the dry riverbed as a dump for rocks and toxic waste, according to Labor. The company plans to dispose of a total of 860 million tonnes of rocks from the mine.
President Charles G. Preble at Southern Peru Ltd.'s head office in New York emphasizes the benefits of the project for the entire population in the region when speaking to NorWatch.
- The project has been thoroughly assessed in several public meetings with the affected local communities, and has been examined and approved by the Peruvian authorities, says Preble.
Labor, on the other hand, claims that the local population has not been part of this process, and demands that the now approved Environmental Impact Assessment must be rendered invalid.
Kværner in Peru
In November 1998, Kværner Metals in San Ramon, USA, made a contract with the Peruvian copper company Southern Peru Ltd. Kværner is to be in charge of project management, engineering, procurement, construction management, and start-up assistance for the smelter in Peru. Kværner's contract is worth approximately 120 million USD. Kværner is engaged on a cost reimbursable fixed fee basis. The costs of the modernisation will amount to 835 million USD in total.
NorWatch took direct contact with Kværner in San Ramon, USA, to have the company's views on the environmental consequences of the entire Southern Peru Ltd. activity in Ilo. Kværner's reply came from vice president corporate communications, Marit Ytreeide, in Norway, who briefly ascertained that Kværner's deliveries contribute to improvement of the environmental aspects of the project.
- Neither we in Oslo, nor Kværner in San Ramon, think that we should comment on our customers, she says.
She also stresses that Kværner is only a supplier to this plant.
- As you certainly understand, another supplier would have delivered the equipment if Kværner had decided not to, Ytreeide says.
Vice president communications Brad Larson in Dyno's explosives department informs NorWatch that the company has delivered some products for testing to Southern Peru Ltd., and that there will possibly be larger deliveries in the future.
Norwatch Newlsetter 1/99