MAC: Mines and Communities

Canada: Rio Tinto Alcan Accused of Polluting Kitimat Airshed to Save Money

Published by MAC on 2015-06-06
Source: Desmog Canada

Previous article on MAC: Canada: Rio Tinto Alcan permit process questioned

Rio Tinto has used various euphemisms to cover its actions in this scandalous story: "Adaptive management" and "Secondment". Rio Tinto having actually funded the role of a key provincial government environmental officer, who drew up the agreement that permitted it to increase sulphur dioxide emissions by 56 per cent - from 27 to 42 tonnes per day (sic).

Now, two local elementary schooltreachers - Lis Stannus and Emily Toews - are challenging what their lawyer appropriately calls "the spectre, in a very real way, of regulatory capture" by the company.

NB - The last article article below describes Rio Tinto Alcan as "the world's largest aluminium producer". However, as of 2014 Chalco (China) was the world's number one producer, following by Rusal (Russia) and then Rio Tinto Alcan - though the margins between them weren't that significant

Rio Tinto Alcan Polluting Kitimat Airshed to Save Money, Tribunal Hears

By Carol Linnitt

1 June 2015

When the B.C. Ministry of Environment approved Rio Tinto Alcan’s application to modernize its aluminum smelter in Kitimat, B.C., local resident Emily Toews assumed that would mean an improvement in the plant’s emissions.

But the modernization project, which will increase the plant’s production, will raise sulphur dioxide (SO2) emissions by 56 per cent from 27 to 42 tonnes per day.

Toews, who suffers from asthma, told a tribunal in Kitimat Monday she decided to remain in Kitimat in 2010, rather than move to West Kelowna with her husband, because she had “previous knowledge that the modernization project would reduce emissions.”

The tribunal, hosted by the B.C. Environmental Appeals Board, is entering its third week in Kitimat after two weeks in Victoria. The board began investigating the government's approval of the Rio Tinto Alcan modernization project after Toews and fellow Kitimat resident Lis Stannus asked it to overturn the decision, saying increased sulphur dioxide emissions endangered their community's health.

The project, granted approval from the B.C. government in 2013, will reduce greenhouse gas emissions from the smelter, but not sulphur dioxide emissions because Rio Tinto Alcan was not required to introduce scrubbers, commonly used in smelters to remove the pollutant from airborne emissions.

Toews, who has a 10-month old child and is a kindergarten teacher, said she’s worried about the impact the increased pollution will have on the community’s children.

Sulphur dioxide, a pungent pollutant that results primarily from fossil fuel combustion, irritates the skin as well as the mucous membranes of the eyes, nose, throat and lungs. Exposure to sulphur dioxide aggravates the respiratory systems of asthmatics and is known to negatively affect the respiratory systems of children and the elderly.

She told the tribunal that several children in the Kitimat school where she teaches suffer from asthma.

“Working at an elementary school there are a lot of illnesses going around,” she said. “During allergy season I often have to help kids, or help administer their medication before they go outdoors.”

”I’m concerned for other people in the community,“ she said.

Toews questioned why, if solutions like scrubbers are a possibility, the province didn’t require them when approving the smelter modernization project.

Scrubbers, which can either create dry sulphur waste or can use seawater which converts SO2 to sulfates for a benign release into the ocean, are commonly used in European smelters.

Toews told the panel she cannot see why the province wouldn’t require Rio Tinto Alcan to employ scrubbers to eliminate the SO2 emissions problem in Kitimat.

“No I’m not opposed to the modernization project, however I am opposed to increasing one emission — sulphur dioxide — and I don’t understand why that emission was left out of this 'state of the art' modernization process,” Toews said.

“I’d like this panel to consider having Rio Tinto produce the best state of the art reduction in emissions possible with the technologies that are available and to my knowledge there are technologies that are available to do that.”

An expert witness who previously gave testimony during the hearings told the panel Rio Tinto Alcan was avoiding paying for the installment of scrubbers and thereby externalizing the costs of SO2 emissions onto the health of local households.

Chris Tollefson, a lawyer representing Toews’ co-apellant Lis Stannus, said the company is primed to install scrubbers in a “plug and play” manner.

“There’s no dispute on the evidence that these scrubbers can be installed with relative ease,” he told the panel. “In fact, the [Kitimat modernization project] has been designed and built with an onsite area specifically set aside for scrubbers to be retrofitted…on what the experts describe is a ‘plug and play’ basis.”

Tollefson said the company’s issue with scrubbers is cost — an estimated $100 to $200 million for installment, not including operating costs. The company estimated the modernization project would cost $3.3 billion but overruns have the project nearing $5 billion last summer.

Rio Tinto Alcan has “made this very clear to the provincial government…that they simply do not want to spend the money.” Government officials from the B.C. Ministry of Environment were also too concerned with Rio Tinto’s interests, Tollefson previously argued, alleging the project’s approval without scrubbers at the provincial level is the result of regulatory capture.

Tollefson said he is asking the panel to “weigh the financial benefit to Rio Tinto Alcan of not being held to a rigorous environmental standard against the cost to the environment and human health of allowing Rio Tinto Alcan to increase its SO2 emissions by 56 per cent.”

The hearings, conducted by the B.C. Environmental Appeals Board, are currently underway in Kitimat.

‘This is B.C.’s Version of the Duffy Scandal’: Government Officials Refer to Rio Tinto Alcan as ‘Client’ in Work Journal

By Carol Linnitt

2 June 2015

Move over Duffy diaries. There’s a new black book in town.

That’s the detailed work journal of B.C. Ministry of Environment senior official Frazer McKenzie, which recounts conversations between ministry officials and Rio Tinto Alcan while the company was applying for a permit to increase aluminum production at its Kitimat smelter.

“Frazer McKenzie was a diligent and thorough employee. He documented ongoings with Rio Tinto Alcan within government that we’d otherwise never know about,” lawyer Chris Tollefson told DeSmog Canada.

During the application process, Rio Tinto Alcan financed McKenzie’s position at the Ministry of Environment through a secondment agreement and government officials repeatedly refer to the company as a “client.”

DeSmog Canada has learned this parlance has become commonplace between ministry officials and industry. Indeed, much of what occurred in the Rio Tinto Alcan case appears to be standard operating procedure.

McKenzie's journal — made public due to an appeal — offers a rare glimpse into the inner workings of B.C.'s Ministry of Environment.

The ministry has argued that it agreed to allow the company to fund McKenzie’s position because of concerns there would be “inadequate staffing to deal with the application” otherwise. Such arrangements with industry are not entirely unusual due to chronic underfunding.*

Rio Tinto Alcan’s application, which was approved by B.C. in 2013, granted the company the right to increase sulphur dioxide emissions in the Kitimat airshed by 56 per cent.

Sulphur dioxide is released from the combustion of sulphur-laden fossil fuels — such as the petroleum coke used to smelt aluminum — and irritates eyes, noses, throats and lungs. People with asthma, children and the elderly are at increased risk from sulphur dioxide exposure.

Two Kitimat elementary school teachers — Emily Toews, who suffers from asthma, and Lis Stannus — are now challenging that permit approval through the B.C. Environmental Appeals Board, arguing the project threatens human and environmental health. The appeal, being heard by a tribunal in Kitimat, is in its third week.

“This case really does represent a situation where you have a regulator that has gotten too close to a powerful and well-resourced private interest that it is supposed to be independently regulating,” Tollefson told the tribunal.

Central to the tribunal are the extensive notes McKenzie took while the Ministry of Environment, including manager of environmental protection Ian Sharpe, and Rio Tinto Alcan discussed the company’s permit application.

On Monday, Sharpe told the appeals panel Rio Tinto Alcan was “after comfort in the authorization process” and that he discussed the possibility of creating “some kind of comfort letter or document…that would give Rio Tinto Alcan’s board the comfort they needed to get on with funding.”

“This is B.C.’s version of the Duffy senate scandal: it shows how deeply comfortable government and industry are with one other,” said Richard Overstall, counsel for Emily Toews.

Notebook Shows B.C. Left Sulphur Dioxide Limits Unanswered

McKenzie’s notes show the provincial government was aware of scrubbing technology — used to eliminate sulphur dioxide emissions from smelters around the world — but chose not to require Rio Tinto Alcan to put that technology in place.

Under cross-examination, McKenzie read aloud his notes, which referenced Rio Tinto Alcan’s request to eliminate the mention of scrubbers from an internal memo. He also noted a phone call from a deputy minister who “did not want to let a little SO2 get in the way” of Rio Tinto Alcan’s project.

McKenzie’s journals also show the company was anxious about the projected increase of sulphur dioxide emissions from the modernization project and wanted regulatory certainty to calm investors.

Rio Tinto Alcan requested specific sulphur dioxide discharge limits during the creation of a joint memorandum of understanding (MOU) with the province. Under the MOU, the province committed to regulate Rio Tinto Alcan under sulphur dioxide standards from the 1970s — and guaranteed those weak rules would stay in effect for the project until at least the end of 2018, even though the province introduced much stronger interim standards in 2014.

Those weak standards were eventually dropped altogether by Sharpe, who said he began to consider them “obsolete,” but told the panel he could not recall when. No new standards for Rio Tinto Alcan’s smelter have been put into place and, according to Sharpe, won’t be in place until B.C. or the federal government mandate them after conducting a full public consultation.

McKenzie’s notes make numerous mentions to Rio Tinto Alcan’s desire for “certainty” regarding potential SO2 standards.

“SO2 is troubling to Alcan,” McKenzie wrote in one entry entered into evidence. “Insisting they have limit ahead of time — something in writing.”

McKenzie noted in one internal correspondence, “Alcan is anxious to get green light…to provide good news on project to stakeholders.”

The province approved the company’s permit in 2013 but did not release an environmental monitoring plan until 18 months later. Although the modernization project is very close to complete, it remains without sulphur dioxide emission limits.

Appellants Point to Regulatory Capture

Between the period of 2007 and 2013, McKenzie was seconded to Rio Tinto Alcan, which funded his position. He worked closely with the company during the permit application process.

Tollefson argues Sharpe's close ties with Rio Tinto Alcan influenced and ultimately fettered his decision-making.

The evidence shows that government of B.C. and Rio Tinto Alcan “deliberated carefully over the language” contained in their agreement “knowing that it might be challenged in court on the ground that it fettered the discretion of the decision-maker charged with granting the permit,” he told the panel.

“We need to reinvigorate the idea of a regulator as a fearless public defender,” he said.

That was not the case with Ministry of Environment officials, who, according to Tollefson, throughout years of documents refer to Rio Tinto Alcan as a “client” and tend to view the world through “industry-coloured glasses.”

Overstall said there was a “slow creep” of industry’s interests into government activities.

“That’s what we see with the Duffy scandal: these guys get so involved they lose their compass,” he said.

“No one wakes up one morning and decides, ‘I’m going to get cozy with industry.’ It’s more of a slow creep,” Overstall said. “They make small decisions one after another behind closed doors thinking what they’re doing is okay until suddenly the public spotlight is shone on them.”

* This story was updated after publication to add more context about the frequency of secondments and the use of the term “client” to refer to companies applying for permits with the Ministry of Environment.

Kitimat's Other Eco-Fight: A Rio Tinto Alcan Primer

Aluminum giant defends plan to increase production without pollution scrubbers

By Carol Linnit

13 June 2015

The sleepy town of Kitimat, B.C. is perhaps best known as the endpoint of Enbridge's proposed Northern Gateway pipeline. Among B.C.'s energy wonks, it's also known as a key liquefied natural gas terminal battleground.

But flying just below the media's radar, another Kitimat battle is playing out in front of B.C.'s Environmental Appeal Board -- one that lawyer Chris Tollefson says may be the most significant case the board has ever heard.

Rio Tinto Alcan, the world's largest aluminum producer, and the B.C. Ministry of Environment are defending a permit that approved a $4.8-billion "modernization" of Rio Tinto Alcan's aluminum smelter. The upgrade will increase the plant's aluminum production by 48 per cent. The permit also gives the company permission to up its sulphur dioxide emissions by 56 per cent, from 27 to 42 tonnes per day.

Two elementary school teachers -- Lis Stannus and Emily Toews, an asthmatic -- are fighting the permit, arguing the increased air pollution unnecessarily threatens human health. The appeal, heard before a three-person tribunal from the Environmental Appeals Board, could overturn the permit or require Rio Tinto Alcan to install sulphur dioxide scrubbers.

Case records show the provincial government was aware of scrubbing technology -- used to eliminate sulphur dioxide emissions from smelters around the world -- but chose not to require Rio Tinto Alcan to put that technology in place. The modernization project, now 94 per cent complete according to Rio Tinto Alcan, remains exempt from provincial or federal sulphur dioxide emission standards.

Tollefson, the lawyer representing Stannus, argues the 2013 permit decision is the result of a too-cozy relationship between industry and regulators. "This case raises the spectre, in a very real way, of regulatory capture," he said in his opening statement.

The tribunal will decide on the appeal after hearing evidence presented by lawyers and representatives from all sides, including the B.C. Ministry of Environment, Rio Tinto Alcan as well as Stannus and Toews. Final arguments will be made in Victoria later this month. As the hearings wrap up in Kitimat, The Tyee breaks down three findings from the case.

Company financed ministry position

Rio Tinto Alcan made an arrangement with the province to fund the position of a key B.C. Ministry of Environment official, Frazer McKenzie, who, along with his superior Ian Sharpe, aided the company during the permitting process, documents submitted as evidence showed.

The province argues the arrangement, known as a secondment, was not unusual and that support from Rio Tinto Alcan was needed to cover the costs of the lengthy and complex application.

Sharpe, manager of environmental protection with the ministry, told the tribunal "there was interest on both sides to enter into an arrangement where the company would provide funds that would cover the costs."

Daniel Bennett, legal counsel for Rio Tinto Alcan, told the tribunal "it is not uncommon for a major protect proponent that is seeking permit approvals to be required by the regulator to fund some aspect of the permitting process."

Sharpe testified he was not fettered in his decision making. But Tollefson argued years of emails, work journals and signed agreements entered into evidence tell another story.

Tollefson pointed to documents that show the ministry's ongoing concern with Rio Tinto Alcan's "comfort level" concerning sulphur dioxide regulations and how uncertainties over pollution limits could negatively impact investment in the project.

One internal correspondence presented by Tollefson read, "Alcan is anxious to get green light… to provide good news on project to stakeholders."

Under cross-examination, McKenzie read aloud from his detailed work journal, which referenced Rio Tinto Alcan's request to eliminate the mention of scrubbers from an internal memo. He also noted a phone call from a deputy minister who "did not want to let a little SO2 issue get in the way" of Rio Tinto Alcan's project.

Tollefson told the tribunal the evidence presented shows Sharpe's "discretion was fettered by pre-existing agreements between the province and Rio Tinto Alcan."

Bennett responded that McKenzie's role in the permitting process does not support an "allegation of fettering" and that Sharpe was not restricted in his decision-making concerning Rio Tinto Alcan's permit.

2013 election played a role

Sharpe testified he was advised by the executive level at the Ministry of Environment to make a final decision on the project before the B.C. provincial election in May 2013. Under cross-examination he said Rio Tinto Alcan expressed urgency for approval: "Their preference [for a permit decision] was sooner rather than later."

Sharpe approved the permit on April 23, 2013, three weeks before the provincial election.

Richard Overstall, counsel for appellant Emily Toews, said the evidence "shows how deeply comfortable government and industry are with one other."

A company spokesman declined to make a representative available for interview.

Scrubber installation: $100 to $200 million

Eighteen months after the province approved Rio Tinto Alcan's permit, it released an environmental monitoring plan. According to the plan, if negative effects occur, the province has an ability to "adapt" rules or order "pollution mitigation" efforts -- like the installation of scrubbers.

Under cross-examination Sharpe said the adaptive management approach was something he "put forward to Rio Tinto Alcan to help them be more comfortable in this process." Sharpe said he did not know of any other cases where adaptive management was used to manage risks to public health. He added that, at his request, Rio Tinto Alcan built in space for scrubbers to be installed on a plug-and-play basis if needed.

Rio Tinto Alcan's lawyer told the tribunal that adaptive management "allows for appropriate corrective action to be taken" if needed to reduce sulphur dioxide emissions and that "without evidence supporting the need for a scrubber… such an order cannot be made in this appeal."

Tollefson estimates the cost of sulphur dioxide scrubber installations lands between $100 and $200 million, not including operating costs. He added the uncertainties about the project's health impacts "loom large" and that adaptive management is being used "as a justification by government to allow a proponent to avoid investing in proven technology that would eliminate identified health risks."

Overstall said that amount may seem high, but represents a small sliver of the project's multi-billion-dollar budget.

He said the evidence shows too many concessions were made to Rio Tinto Alcan. "They were persuaded to see it solely as getting the job done rather than including the protection of local residents and their environment."

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