Trusting business: Environment/health edition
Some commenter once suggested that we could trust businesses to do the right thing. This sentiment is so removed from actual experience that it’s puzzling. Sure, on small-scale things I do trust businesses—which are closely regulated by law regarding commercial transactions—to sell me produce, books, and the like. But commercial transactions are closely observed—by the buyer, generally, though sometimes businesses taint the products they sell so that you cannot detect the problem until, for example, your pet dies from the adulterants added to the food.
Here’s a terrific example of the untrustworthiness of businesses by Les Blumenthal in McClatchy newspapers:
A 562-foot smokestack that spewed a plume of arsenic, lead and other heavy metals over 1,000 square miles of Washington state’s Puget Sound for nearly a century remains a fitting symbol of the largest environmental bankruptcy in U.S. history.
However, it also tells a cautionary tale of how a company that’s intent on shedding its environmental liabilities could manipulate the nation’s bankruptcy system.
In this instance, Grupo Mexico, S.A. de C.V., tried and failed, according to lawyers and regulators who are close to the case. It took a federal judge, however, to block what some bankruptcy lawyers call a "candy heist" that could have left taxpayers responsible for cleaning up 80 polluted sites in 19 states, a job that initially was estimated to cost $6.5 billion.
The smokestack in Ruston, Wash., once the world’s biggest, has been demolished, as has the copper smelter that fed it. The smelter was owned by Asarco, a century-old mining, smelting and refining company based in Tucson, Ariz., that once was listed on the Fortune 500. Grupo Mexico bought Asarco in 1999.
In court documents, Grupo Mexico has denied that it maneuvered Asarco into bankruptcy in an attempt to evade its environmental responsibilities. Grupo Mexico refused to comment for this story.
"Grupo Mexico tried to use a bankruptcy court to avoid Asarco’s cleanup responsibilities, and they almost got away with it," charged Sen. Maria Cantwell, D-Wash.
Asarco officially emerged from bankruptcy earlier this month, and Grupo Mexico has paid $1.8 billion in cleanup costs. In addition to claims filed by the federal Environmental Protection Agency, 15 states — including Washington, Oklahoma, Missouri, Colorado, Arizona, New Mexico and Texas — and various Indian tribes and private parties had filed environmental claims against Asarco.
State and federal regulators say they’re more than satisfied.
Unless the laws are changed, however, Cantwell and others say that another company almost certainly will try to manipulate the bankruptcy system the way they charge that Grupo Mexico did…
