The Multinational Monitor



Opening the Door to Disaster

by Jed Greer

Within a span of two weeks in August 1993, major accidental fires broke out at three chemical factories owned by multinational corporations in Ireland. The fires focused attention on the environmental and social price of the foreign investment "open door" policy which Ireland has fostered for decades and from which multinationals have long profited.

Opening the door

Until the 1950s, Ireland's economy was almost completely agrarian. While Irish travel brochures entice tourists with bucolic images of green rolling hills and pristine inland lakes, since the 1960s the Irish government has used other lures - generous tax incentives and large capital grants for construction and employee training - to attract a different kind of foreign visitor: multinationals. Other factors have drawn foreign companies to Ireland as well: a relatively low-wage but well-educated labor force, environmental regulations less stringent than elsewhere in Europe and access to markets of the European Union (EU, formerly the European Community), which Ireland joined in 1973.

Today, Ireland's industrial sector accounts for 37 percent of the country's gross domestic product, compared with 11 percent for agriculture. Over 1,000 foreign corporations, two-fifths of them from the United States, now operate on Irish soil and provide at least half of Ireland's employment. More than 80 percent of Irish manufacturing exports are produced by foreign-owned companies.

Yet Ireland remains one of Europe's poorest nations. The Irish per capita income is half the average of countries in the Organization of Economic Cooperation and Development (made up of the world's industrialized countries). Ireland's unemployment rate exceeds 20 percent, the highest in the EU.

County Cork: target of the chemical industry

The multinationals which have entered though the Irish "open door" have brought with them a host of environmental problems. The threat pollution poses is especially apparent in County Cork, an area in southern Ireland which hosts 60 percent of the country's chemical industry. For two decades, over a dozen pharmaceutical and chemical companies, including giants such as Johnson & Johnson, Eli Lilly, Mitsui, Schering-Plough, Henkel and companies from Sweden, France and Holland ha% c located subsidiaries in the Cork region. Multinationals are particularly concentrated in the town of Ringaskiddy on Cork Harbor, where affiliates of the U.S. companies Pfizer, SmithKline Beecham and Archer Daniels Midland (ADM), and of the British firm Hickson International operate. Most recently, the Swiss company Sandoz built a plant in Ringaskiddy, a controversial, widely opposed move which revealed enormous public concern about the area's chemical facilities,

Multinational affiliates in the chemical sector have brought extremely toxic processes and chemical inputs to Ireland, and frequently generate large amounts of hazardous wastes. The government "got dirty industry because it was an easy option," one County Cork resident asserts. According to Maura Burke of the harbor town of Cobh, the region "has for a very long time been a very dirty area." Una Chamhers has lived in another County Cork town, Carrigaline, for 40 years. She has watched "how the whole area has broken down" due to industrial pollution over the past several decades.

Many citizens in Ringaskiddy and nearby towns have been worried for years about the multinationals' discharges of tainted water wastes into Cork Harbor. In Chambers' opinion, the harbor is "a waste bin for the chemical companies." "I wouldn't put the dog in there," says another resident. "It's completely gone."

A 1990 Greenpeace analysis of sediments from the harbor found elevated levels of metals such as lead, zinc and copper from industrial discharges. In 1993, new analysis by Greenpeace showed that carcinogenic compounds as well as other toxic chemicals and heavy metals were being pumped into the harbor daily; the industrial contamination exceeded Eli pollution levels for shellfish and had impaired the health of almost 70 percent of the harbor's fish.

Many County Cork residents have also been enraged by the noxious odors which frequently emanate front the chemical plants, and are disturbed about emissions which they may not smell. During particularly bad periods, families with young children have been forced to leave their homes. Maura Burke, a local resident who complains that she has been unable to get a definitive government analysis of the safety of the region's air or water, has frequently been woken up late at night by what she describes as "terrible" smells in her bedroom. Although company representatives are apologetic about the stench, the problem persists. Such unresponsiveness to public concerns is characteristic of many of the chemical companies in the area. "They do as they please," reports Chambers.

Cork physician Mary Dunphy has suggested that emissions from the chemical facilities are connected to an unusually high rate of childhood asthma in areas downwind from the plants and also to the incidence of a rare form of cancer which has already claimed the lives of two children. Dr. Dunphy has called for the establishment of an official toxicological service to monitor the public health and environmental impacts of the concentration of chemical firms around Cork Harbor; the government has yet to heed her demand.

The chemical corporations' pollutants have also harmed the local economy. Farmers have attributed severe destruction of their crops to the factories' pollutants and anglers have abandoned fishing in the harbor because of contamination. According to Geraldine O'Brien of the Cork Environmental Alliance (CEA), one fish shopkeeper whose store is on the harbor has a sign indicating his fish come from West Cork, about 50 to 60 miles up the coast. In addition, owners of guest houses in the vicinity of chemical plants have complained about the effects of industrialization on their business and on the area's tourism sector in general.

The accidents and their aftermath

Simmering community concerns about the multinational chemical industry came to a boil in August 1993. Within two days of each other, in Ringaskiddy, fires broke out at subsidiaries of Hickson International and Archer Daniels Midland. A third soon followed, in County Kilkenny at a resin plant owned by U.S.-based Lawter International; two employees were seriously injured in this fire. The Hickson blaze, at a pharmaceutical facility, received the most attention in the media, perhaps because it was the first and largest of the accidents, but also because official reaction to the fire revealed numerous problems with Ireland's regulation of the chemical industry - and of multinationals in general.

Started by a large explosion early in the morning of August 6, the massive fire at Hickson's plant lasted seven hours and sent two workers as well as 30 firefighters to the hospital. Lacking any immediate instruction from authorities such as the Cork County Council, the area's local regulatory body, many people close to the plant site simply had to shut their windows and wait. "I had incredible difficulty in trying to find out if I could leave my house," says a resident near the Hickson facility, noting that up to 200 neighbors faced a similar dilemma.

It took authorities an hour and a half to announce the fire on the radio and notify people who had not heard the explosion. This delay could have been, but ultimately was not, disastrous; water pressure problems inside the plant had impeded efforts to contain the fire which, as a result, nearly ignited tanks containing highly toxic chlorinated solvents. Firefighters averted an accident of far greater proportion than that which occurred by a matter of minutes; had the solvents been ignited, those in the vicinity venturing outside could have faced tremendous health risks.

Besides difficulties with its on-site water pressure system, Hickson's retention pond, built to hold contaminated water until it could be treated, overflowed during the fire, releasing thousands of gallons of polluted water onto a nearby beach and into Cork Harbor. Combined with discharges during the August 8 fire at ADM's plant, which makes citric acid for the food industry, an estimated 150,000 gallons of water, tainted with some 1,500 gallons of chemicals, spilled into the harbor.

In a report it issued on the fire, Hickson claimed that its "response to the emergency was swift and efficient." The report acknowledged the overflow and water-pressure failure, but said the latter problem was not due to a fault at the facility's site.

Rather than serve as a source of substantive information during the Hickson emergency, the Cork County Council tried to mollify the public. As thick smoke enveloped neighboring towns, the Council hastened to assure people they were in no danger (while nonetheless advising people to stay indoors and close their windows). "How did they know?" Chambers wonders of early assertions that the fire posed no threat to public health. When the Council announced later on the day of the fire that tests showed no toxins in the air, environmental groups quickly challenged the claim, asserting that the Council possessed neither the equipment nor the time necessary to test for poisons such as dioxins. These compounds can be created by the combustion of chlorinated material and are extremely hazardous even in minute quantities.

The Cork County Council also engaged in a brief, unsuccessful cover-up of the fire's environmental effects. The Council allowed the water used to quell the fire, after being sprayed on the burning Hickson plant, to be discharged into Cork Harbor through a sewage outfall pipe. A Council chemical analysis of the used water revealed the presence of carcinogenic chlorine substances including chloro-benzene, but the Council kept this information from the public. It only acknowledged the contamination after Greenpeace released its own test results a week after the fire.

The County Council's behavior, in this instance and throughout the fires' aftermath, further undermined citizens' confidence in the regulatory body's willingness to protect their interests. "Both the chemical industry and Cork County Council's credibility suffered a severe dent that they will not easily recover from," asserts the CEA's Geraldine O'Brien, "particularly the local authority whose credibility was low anyway." Una Chambers says simply: "The Council is more in tune with industry than the people they're supposed to serve."

Subsequent investigation by Ireland's Environmental Protection Agency (EPA), newly formed and facing its first major crisis with the Ringaskiddy accidents, showed that monitoring by the County Council from January 1992 to July 1993 had actually identified fewer environmental breaches of Hickson's license standards than the company's own records. The investigation also disclosed that Hickson had exceeded nearly all of the parameters of the license. While these were noteworthy revelations, environmentalists were disturbed that the EPA's report failed to hold either the Council or Hickson accountable for their actions. According to O'Brien, "The EPA report on Hickson is a catalogue of law-breaking, but they were not punished."

Other problems with the EPA emerged in the wake of the fires. The Agency's creation was first proposed in 1989 because of doubts about local authorities' ability to regulate the chemical industry effectively. It took three years for the legislation forming the agency to be implemented. As of the summer of 1993, it still was not fully staffed and had yet to move into its new headquarters.

Another problem with the EPA is that it lacks the operative powers to fulfill its mandate. Particularly troubling was the refusal of John Browne, Ireland's minister of state at the Department of the Environment, to empower the Agency to officially convene a public inquiry into the Ringaskiddy fires and to summon witnesses. "If they didn't think that is was serious enough to use full powers," Midleton's Natasha Harty says of this decision, "I don't know what they'd want as a serious accident. It was about as serious as you get."

According to O'Brien, one consequence of the accidents has been the Cork community's heightened distrust of the chemical companies and their government regulators. In a Cork Examiner poll of 300 county residents taken after the Ringaskiddy accidents, 71 percent (up from 62 percent in November 1989) of those surveyed told the newspaper that they did not believe the chemical companies were open and honest about their activities or their effects on the environment. Additionally, 86 percent of those surveyed said they had limited or no confidence in local authorities such as the County Council to guard the environment against pollution. Sixty-eight percent felt that the chemical corporations had a "bad record," while 70 percent considered existing pollution penalties too weak to be a deterrent.

Despite community discontent, says O'Brien, in terms of regulator,- scrutiny and oversight "nothing very much has changed" more than half -a year later. Hickson, for example, has resumed operation even though, as the company itself announced, it could not guarantee compliance with its license requirements. Those requirements have not vet been subjected to any review, but when they arc, O'Brien tears they will be loosened.

Representatives from Hickson and ADM refuse to comment about the accidents and their aftermath and Lawter officials did not respond to requests for comment. Robin O'Sullivan, a public relations consultant for a number of County Cork's chemical corporations who was on hand to help Hickson during its emergency, says the firm s main problem at the time was a failure to communicate effectively that people should not have worried. Although admitting that the Hickson fire had hurt people's confidence in the industry, he claims that "only the company has suffered," and that there was "no environmental damage." Over the last six months, he adds, the chemical companies including Hickson have made an effort to keep in touch with the community and have re-examined their accident contingency plans.

The economic cost of the "open door"

The August 1993 plant tires drew attention to the price Ireland was paying for hosting dirty multinational investment, and raised questions about the country's foreign-dependent economic development strategy.

"The chemical industry is a proportionally large employer in Cork," notes O'Brien, and "therefore the community is very divided. However, I think many would feel, at this stage, that the concentration of the chemical industry is too much and no further [facilities I should be added." And in the Cork Examiner survey, 58 percent of the people polled agreed with the statement: "Protection of the environment should be given priority, even at the risk of losing potential new jobs."

Many citizens are beginning to question how much economic benefits multinational interests do bring. "The jobs promised don't ever materialize," contends Natasha Harty. In Ringaskiddy, foreign investment has generated only half the number of jobs forecast by industrial planners. Harry adds that while it is easy to count the number of jobs a particular factory may bring, it is extremely difficult to determine, quantitatively as well as qualitatively, the severe damage to other livelihoods - local fishing, for example -- caused by industrial pollution: "The whole issue has not been calculated in a fairway [ to account for] the negative effect of industries and the few jobs they give," she says.

Overall in Ireland, the chemical industry accounts for just 6 percent of employment, compared with food production's 25 percent, the highest proportion in the country. Moreover, the contribution of food production to the Irish economy annually per employee is more than twice that of the chemical industry. Given the threat toxic pollution poses to food safety, the harm that large-scale chemical manufacturing could do to Ireland's employment mainstay is considerable.

Chemical industry pollution may also harm the tourism industry, and cost jobs in other service-related fields.

Many of the jobs that chemical and other multinationals have brought to Ireland may soon disappear, making the country's environment-for-jobs trade look even less beneficial. The Oslo and

Paris Conventions for the Prevention of Marine Pollution oblige signatories, including Ireland, to phase out most chlorine-related substances by the year 2000. If implemented, the phase-out would render obsolete a substantial part of Ireland's chemical production and the jobs it provides.

A clearer future

Long-term Irish industrial employment will come from clean technologies which eliminate hazardous processes and products, opines Greenpeace Toxics campaigner Clare O'Grady Walshe. "The reality," she says, is that pursuit of "a two-pronged economic strategy [high-quality food production and tourism on the one hand, dirty foreign investment on the other] on an island as small as this" can only lead to "environmental and economic suicide."

For examples of ecologically sustainable development, O'Grady Walshe points to the West of Ireland, where there are economies based on a thriving tourist industry and the manufacture of items such as sweaters which use no toxic dyes or bleaches, and where the environment is still relatively unspoiled. But, she notes, the Irish government has yet to harness the region's overall sustainable development potential, and the West continues to sutler high levels of unemployment and emigration.

Some believe that the current confluence of political and economic forces makes now an opportune time for Ireland to shift its policies: to demand foreign investors adhere to a higher performance standard and for the country to devote more attention to peripheral areas, such as the West.

Journalist Fintan O'Toole, for example, noted in an Irish Times article published shortly after the Ringaskiddy tires that under Europe's Single Market, Ireland's lower regulatory standards will provide less and less of an "advantage" in trying to attract dirty foreign investment, as in the long run, environmental standards will likely become more uniform across the EU. O'Toole argued that the foreign chemical corporations with operations in Ireland do not want to move their facilities, and that Ireland can thus afford to be much tougher with the chemical corporations without having to worry about frightening away future investors and the lure of jobs they hold. Now is an excellent opportunity, O'Toole suggested, to "reappraise the balance of power" between the government and multinationals.

Even if it is true that Ireland may be temporarily immune from threats of corporate flight, adopting a new posture toward the multinationals on which it has grown so dependent will be a momentous task for the country, because its "open door" to foreign investment has taken a political as well as economic and environmental toll. In County Cork, this is reflected in people's view that Irish governmental authorities have acted on behalf of foreign corporate investors over and against citizens' interests as well as in grave concerns about inadequate regulation of industry. Many residents share Maura Burke's conviction that the authorities are "not really looking after the welfare of the people."

The dominance of multinationals in Ireland's economy, and their lack of public accountability, challenges the nation's sovereignty and people's ability to exercise democratic control. Multinationals "call the shots," says one anonymous Cork resident. Una Chambers adds that the multinationals are "imperialist" and "able to tell the government how to run the country."

Strong-arming by Sandoz

A recent arrival in Ringaskiddy is the Swiss-based Sandoz, which built a new pharmaceutical plant on Cork Harbor-the biggest chemi-cal industry investment in Irish history - and two incinerators to bum the facility's wastes. When Sandoz appeared in County Cork in 1989, it met with over 200 objections, but within two months the county's regulatory authority, the Cork County Council, gave Sandoz a license which permitted the company to emit dioxins from its incinerator. In response, 13 groups appealed the Council's decision to Ireland's State Planning Hearing Board in 1990.

Much of the opposition focused on Sandoz's poor environmental record, especially its responsibility for one of Europe's worst ecological catastrophes, a 1986 fire at a Swiss pesticide warehouse which caused the spillage of tons of toxic chemicals into the Rhine River and the poisoning of the river's ecosystem.

Critics also blasted Irish governmental bodies which they blamed for the region's environmental problems. One target of public anger was Ireland's Industrial Development Authority (IDA), which directs Ringaskiddy's long-term industrialization and works to attract foreign investors such as Sandoz. Residents charged the IDA with neglecting social concems as it pursues industrial development and courts multinationals with generous monetary incentives. Speakers also sharply criticized the Cork County Council for its failure to adequately regulate emissions from the area's chemical facilities.

The County Council had been particularly lax in setting regulatory standards for Sandoz. A Swiss chemical industry expert, Dr. Jesper Hansen, told the Hearing Board that the County Council had allowed levels of air and water emissions from the Sandoz facility much higher than either Swiss or German authorities permitted. In addition, Sandoz had not submitted a full risk analysis with its planning application for the Ringaskiddy plant, a standard submission in Switzerland. Nor had Sandoz provided details of safety measures, including fire-fighting capability and evacuation procedures in case of an accident, which are also demanded in Switzerland. Sandoz representatives said the company had not supplied an emergency plan because no danger of a chemical spill or fire existed at its plant, a claim which did not persuade residents.

Although the Hearing Board granted Sandoz planning permission and licenses in July 1990, it did impose environmental standards which required zero dioxin emissions from the company's incinerator. Subsequently, however, Sandoz applied to the County Council for a new incinerator license which allowed for pre-Hearing Board standards - that is, which allowed dioxin emissions. The Council granted this request, and, after a number of appeals, the Hearing Board finally allowed it, in November 1993. "Sandoz," says Cork Environmental Alliance's Geraldine 0'Brien, "has quietly succeeded in [pushing] the Irish planning system into the realm of utter farce."

The vigorous public opposition to Sandoz, and fear of its possible effects on potential investors, frightened Irish government officials. Recent legislation - the 1992 Planning and Development Act and the 1992 Environmental Protection Agency (EPA) Act - will make it harder for Irish citizens to have a role in decision-making on any future foreign investments. The first law curtails people's participation in planning permission matters for new corporate industrial projects. O'Brien calls it "one of the most anti-democratic pieces of legislation in recent years." Although environmentalists have generally applauded the creation of the Environmental Protection Agency, they have criticized the EPA Act for its restricting of public appeal rights to the Hearing Board on pollution licensing decisions made by local authorities. The recommendation to restrict third-party appeals for licenses came from a government--commissioned report co-authored by Sandoz's construction engineering company.

- J. G.

Jed Greer works with the Greenpeace International Economics Unit.

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