The Multinational Monitor


M A T T E R S   O F   C O R P O R A T E   C O N S C I E N C E

The Multinationals' Squeeze on Ireland

by Sheila Harty

Ireland, with its lovely lush countryside, is known as a get-way, but not just for tourists. It has also become a get-away of sorts for multinational corporations looking for a sanctuary from taxes and regulations.

U.S. multinational corporations arrive in Ireland at the rate of one every twelve weeks. Of the 360 multinationals in Ireland today, 140 are either chemical or pharmaceutical companies. But in a country with 3.5 million people (half of them under 21), and 15 percent unemployment, these capital-intensive industries do not create secure jobs. They are causing some serious problems, though.

The industrial "evolution" of Ireland has been documented by the Alliance for Safety and Health, (ASH), a citizens environmental group, in two publications: Toxic Ireland (1982) and Making Their Merck on Ireland (1983).

Their story begins in the late 1950s when electricity was just coming to most parts of rural Ireland, and a plan was enacted to open Ireland's agricultural economy to foreign capital. The plan, managed by Ireland's Industrial Development Agency (IDA), was intended to reinforce Ireland's very weak industrial base. Originally part of the Department of Industry and Commerce, the IDA is now an autonomous state agency with offices around the world.

The IDA's strategy was to entice foreign investment by offering generous government grants and subsidies, tax free exports, and, until the year 2000, a maximum 10 percent corporation tax. Long-term, fixed interest rate financing was offered through the IDA's loan agency. Ready-built factories and tax free depreciation allowances were also available. In addition, the IDA provided training grants of up to 100 percent of costs for workers in new industries.

The result was a rapid influx in the 1960's of chemical, petrochemical, pharmaceutical, and electronic industries into Ireland. This industrialization increased even more after Ireland joined the European Economic Community (EEC) in 1972, providing duty-free access to the European trade market.

There had been no chemical manufacturing in Ireland prior to World War II. But by 1980, the chemical and pharmaceutical industry was employing 14,000 workers, with exports worth almost 20 percent of the country's GNP-80 percent of which comes from U.S. companies.

Significantly, this expansion coincided with an escalation of occupational and environmental regulation in the U.S.which prompted U.S. corporations to export their toxic hazards by setting up factories in under-developed countries like Ireland. Of the top 17 American drug companies, 11 now have subsidiaries in Ireland: Pfizer, Merck-Sharpe & Dohme, Warner Lambert, Smith Kline, Abbott, Johnson & Johnson, Olin, Eli Lilly, Syntex, Squibb, and recently Schering Plough. As a result, the country now ranks tenth in the world as a pharmaceutical exporting country.

The Merck-Sharpe & Dohme Corporation set up a 35 million pound manufacturing plant at Ballydine on the County Waterford and South Tipperary border in 1972. The company promised 450 jobs and stringent air pollution controls for the 35 bulk chemicals used in manufacturing drugs. But problems eventually emerged.

There were at least three explosions in the plant, and neighboring residents complained of respiratory problems. In 1980, animals began to die, cattle miscarried, twin births and deformities increased, milk yields dropped, and digestion and breathing problems became evident. A yellowish dust settled on pastures, and a heavy metal contamination was discovered on vegetables. Despite all this, the company denied knowledge of any pollution sources. Several investigations by the Institute for Industrial Research and Standards (IIRS) also found no cause, but these reports were deemed "confidential" and not released to the public.

In 1981, two more explosions occurred in the plant, cattle deaths rose, and other abnormalities in animal and plant life appeared. A Trinity College, Dublin study led some people to conclude that the pollution was a toxic combination of chlorine and bromine with flourine and sulfur.

The plant is still open and the IDA has recently welcomed the decision by Merck to open an adjacent 1.5 million pound development laboratory.

The Raysbestos Manhattan Corporation came to Ovens, County Cork in 1975 with plans to employ 600 people and to import 300 tons of asbestos annually. Health effects on workers was one community issue, but when attempts were made to locate a dump for the asbestos waste, the opposition began in earnest. When midnight dumping ensued, residents protested by picketing, documenting abuses, and insisting that the waste be deposited back in factory grounds.

The IDA spent 10,000 pounds in newspaper ads alone to convince the people of Cork that asbestos was safe. Meanwhile, however, Raysbestos Manhattan could not get its accounts signed by auditors due to the number of asbestos injury claims from former employees in its American plants.

In December, 1980, the company announced it was pulling out of Cork. Its asbestos dump in Ringaskiddy remains.

A 1977 report commissioned by the IDA estimated that approximately 20,000 tons of toxic waste is generated in Ireland each year, including lead, chrome, mercury, asbestos, phenols, cyanides, arsenic, acids, solvents, and low level radioactive wastes. The IIRS puts the figure at 37.000 tons and admits to not knowing where it is disposed each year. Although 95 percent of solvents are exported as a recyclable commodity, the majority of toxic wastes are dumped on factory grounds which are later sold and unwittingly redeveloped.

In the last few years, the IDA has insisted on plans for waste treatment to be included in future planning applications. Local authorities in the Dublin area have accepted a proportion of these wastes at dump sites like Dunsink and through sewage treatment plants like Ringsend. Where local authorities have not taken on these wastes, private "tipping" of almost 30 tons each day is the norm. The IDA has no proposal, however, for monitoring the transportation of hazardous or toxic waste. Consequently, clandestine dumping at remote or unknown tipheads is carried out by some 50 or more waste disposal contractors who do not even have to disclose their cargoes.

This form of dumping has caused problems throughout Ireland, including a dramatic fish kill of June, 1980, in the Gradugue and Funcheon Rivers at Mitchelstown, County Cork; a fish kill at Blackwater River near Fermoy in 1981; a dumpsite in Skerries where liquid wastes have created a poisonous lake; and the kill dump in County Kildare which often catches on fire.

An Foral Forbartha, a semi-state agency, has estimated that the length of rivers with satisfactory water quality decreased from 83 percent in 1971 to 72 percent in 1979.

About 40 percent of this water pollution is from industry, another 40 percent from sewage, and 20 percent from agricultural wastes such as pig slurries. The increased use of fertilizers and pesticides in a country of almost constant rainfall also adds to water pollution, as run-off from fields enters the waterways.

Unfortunately, there is no central agency in Ireland to assess, implement or enforce environmental policies on a uniform nationwide basis. The onus of oversight responsibility is on local authorities. County Councils lay down guidelines, and industries are supposed to keep records open to inspection. But in effect, the companies are left to monitor themselves with no requirement for disclosure.

Given the kind of foreign industry investing in Ireland, a strict and vigilant accountability is needed both for the sake of the environment and the safety of the workers. Ireland does need the jobs that foreign industry offers. But the IDA is playing poor poker in not negotiating stringent terms with the multinational corporations.

The type of economic development that has shaped Ireland in the last 20 years has hardly been a boon to the country. Excessive grant subsidies and tax relief actually add to unemployment by causing recipient industries to be easily attracted and poorly selected before their long term viability has been assured. Most multinationals stay in Ireland for the first few years of cost cuts, then close up and move out when the cost/benefit ratio readjusts. Meanwhile, their temporary residence drains off financing and employment from native industry.

Ireland needs to develop labor-intensive indigenous industry and crafts, such as forestry, fishing, farming, shipbuilding, and textiles. This may not be a ticket to successful world market competition, but it may be a way out of inflation, unemployment, and dependence.

Sheila Harty is a freelance writer and consultant on international consumer issues and winner of the 1980 George Orwell Award for her book, Hucksters in the Classroom. She recently returned from sabbatical on the Faculty of Commerce, University College Cork, Ireland.

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