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Smelter Case a Big Mess
in More Ways Than One

by Les Blumenthal
Tri-City Herald, February 18, 2008

(Cheryl Hatch) Canada’s Teck Cominco smelter north of Spokane has set off legal action. WASHINGTON - Though the dumping stopped more than a dozen years ago, no one is sure who will clean up the 26 billion pounds of hazardous waste from a Canadian smelter that has turned the reservoir behind Eastern Washington's Grand Coulee Dam into an environmental nightmare.

The dispute has plowed new legal ground and threatened cross-border retaliation. It also prompted a clash between federal regulators in Seattle and Environmental Protection Agency and Justice Department lawyers in Washington, D.C., amid allegations of interference by political appointees with ties to the mining industry.

The wrangling could stretch on for years. By some estimates, the environmental mess, one of the worst in the nation, could cost $1 billion to clean up.

For nearly a century, slag from the Canadian smelter in Trail, B.C., 10 miles north of the border, was disposed of in the Columbia River.

Gradually, such heavy metals as arsenic, cadmium, mercury, copper, lead and zinc leached out of the slag and accumulated in Lake Roosevelt, the 150-mile-long reservoir behind Grand Coulee Dam.

Officials in the EPA's Seattle regional office sought to hold the owner of the smelter, Teck Cominco Metals Ltd., responsible. So far, U.S. courts have agreed. A ruling from a federal appeals court, which the Supreme Court recently let stand, for the first time held a foreign company like Teck Cominco liable under the U.S. Superfund law for cross-border pollution.

The decision has implications for mining operations, coal-fired power plants and manufacturing factories in the United States, Canada and Mexico whose emissions cross the border.

U.S. and Canadian mining, energy and other business interests warn that the ruling could swamp courts on both sides of the border with retaliatory lawsuits.

"It's the first statement by an appellate court that a polluter can't use the border as a shield," said Michael Robinson-Dorn, an assistant professor of law at the University of Washington who has tracked the case closely.

COMPROMISE OR CONCESSION?

Concerned about legal precedents and diplomatic fallout, the Bush administration argued that such cases are best resolved though international negotiations.

In a terse diplomatic note to the State Department, Canada's ambassador agreed and cautioned that similar cases could be filed on both sides of the border if Teck were held liable.

Administration officials deny there was any political interference. They insist their motivation in negotiating a controversial agreement with Teck was to resolve a complicated environmental situation, not to pre-empt an adverse legal decision.

Critics contend that Teck flexed its political muscle in Washington, D.C., and administration officials listened.

"Teck Cominco has thrown everything at us," said Richard DuBey, a Seattle lawyer representing the Colville Indian Tribe, whose reservation adjoins Lake Roosevelt. "They have unlimited resources, both legal and political."

SUPERFUND CONSIDERATIONS

EPA's Seattle office first began studying Lake Roosevelt as a possible Superfund site in 1999. The office eventually concluded the lake should be listed because the heavy metals in the river and on its banks presented an "imminent and substantial threat" to human health and the environment.

Hoping to head off a Superfund designation, Teck offered to do a limited human health study. But after months of negotiating, EPA's Seattle office concluded the study would be too limited.

In December 2003, the Seattle office issued a unilateral order directing Teck to do a thorough study and evaluate cleanup alternatives. It was the first time a foreign company whose pollution had crossed the border had been issued such an order.

John Iani, who headed the EPA's Seattle office at the time, said officials in Washington, D.C., were well aware of the order.

"No one questioned it," Iani said.

But within days, the order was under attack. Teck refused to comply, arguing that U.S. Superfund laws don't apply to foreign companies. The U.S. Justice Department refused to enforce the order, despite requests from the EPA's Seattle office.

Eventually, the Colville tribe, later joined by Washington state, sued to enforce the order.

'FOX GUARDING THE HENHOUSE'

As that lawsuit gained momentum, administration officials led by then-EPA general counsel Ann Klee stepped in.

Klee represented mining and timber trade associations before joining the administration, first as counsel to then-Interior Secretary Gale Norton, then as EPA general counsel. Norton's husband, John MacCleod, had also represented the mining industry and was a past recipient of the National Mining Association's Distinguished Mining Lawyer award.

Klee was part of a group in the administration of former mining, timber, energy and business lobbyists.

They included Mark Rey, a former timber industry lobbyist who oversees the U.S. Forest Service; James Connaughton, chairman of the White House Council on Environmental Quality, who once represented General Electric Co. and the mining and smelting company Asarco; and Thomas Sansonetti, who represented mining and energy interests before becoming the assistant attorney general at the Justice Department in charge of environmental litigation.

"It was the fox guarding the henhouse, and we were the guard dog barking on the outside," said Bill Dunbar, a former EPA spokesman in Seattle who was involved in the internal deliberations over Teck. "We feel vindicated by the courts, even though we had the rug pulled out from under us by the politicos in Washington, D.C."

Teck spent nearly $650,000 on lobbyists, including a firm headed by well-known Republican operative Charles Black Jr., who is now a senior adviser to John McCain's presidential campaign.

Alexandra Smith, a former Washington state assistant attorney general who helped handle the Teck case, said there was no question politics trumped policy.

"My own perception is the federal government sold us down the river," she said.

EPA and Justice Department lawyers in Washington, D.C., decided to rescind the order issued by the EPA's Seattle office. Led by Klee, the EPA instead negotiated an agreement with Teck.

Smith, Dunbar and DuBey believe the agreement is virtually unenforceable. They say it is riddled with loopholes, could delay cleanup for years and ultimately could allow the company to dodge its cleanup liabilities.

"The company did not agree to be bound by the Superfund, and EPA did not pursue the issue," said DuBey, the Seattle lawyer representing the Colville Indian Tribe.

'THE QUICKEST WAY'

Under the agreement, Teck will set aside $20 million to pay for a voluntary study of the Lake Roosevelt contamination. In an e-mailed statement, the EPA said the agreement was "fully enforceable," consistent with Superfund "models and policies," and noted that the agency retained full oversight authority.

"The Office of General Counsel typically plays a role in matters that involve important questions of law with national and international significance, as was the case here," the statement said.

Klee, who's now General Electric's top environmental lawyer, declined comment through a spokesman.

Michael Bogert, who replaced Iani as head of EPA's Seattle office and signed the agreement, said the negotiations were difficult but that the end result was "fair and appropriate."

"We saw this as the quickest way to begin cleanup," said Bogert, who is now counsel to Interior Secretary Dirk Kempthorne.

Teck officials say they will abide by the agreement, and they insist the company is not covered by the U.S. Superfund law.

"We will hold to the agreement with EPA," said Dave Goldewski, a vice president for Teck Cominco American Inc., a Teck subsidiary based in Spokane. "If actions need to be taken, we will clean it up."

In the end, if the agreement fails to resolve the cleanup problems, DuBey said, the fallback is the appeals court ruling holding Teck responsible.

Dunbar, the former Seattle EPA spokesman, said the agreement was little more than a smokescreen.

"Twenty million dollars is pocket change to Teck," he said. "There is a lot of concern that neither the environment nor the people who live up there will be protected. U.S. taxpayers may ultimately bear the burden."


Les Blumenthal
Smelter Case a Big Mess in More Ways Than One
Tri-City Herald, February 18, 2008

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