Doe Run Peru faces renewed environmental criticism
LIMA, March 26 (Reuters) - With Doe Run Peru nearly shuttered amid sliding metals prices and tight credit, a Peruvian environmental group has released a new study saying the company dragged its feet on cleaning up the town around its smelter in La Oroya.
The company halted 95 percent of work this week at its sprawling plant after banks cut its credit lines, strangling its ability to buy concentrates.
The government is weighing whether to give Doe Run a $75 million bailout to save thousands of jobs. The government is also mulling whether to grant it an extension to meet terms of an environmental cleanup plan for La Oroya, long ranked as one of the world's most polluted cities.
"It's dirtier now than it was before," said Corey Laplante, a U.S. Fulbright scholar at the Peruvian Society for Environmental Law who led the study.
"If the government is going to give this bailout, it needs to attach a number of conditions: more transparent financial reporting, stronger public-participation mechanisms and stricter air-quality standards," he told Reuters.
Doe Run says it has been lowering emissions of polluting metals since it bought the smelter in 1997 from an old state-run company.
But Laplante says official data shows pollution has risen over a longer time frame, going back to 1995.
Using information from the Sindicato station that monitors lead in the air, Doe Run has said pollution fell 77 percent between 1997 and 2008.
Laplante says using 1997 as a baseline is misleading because pollution spiked that year, making pollution in subsequent years look low. When 1995 is used as the baseline, pollution at the station actually rose 6 percent through 2008, he said.
Victor Andres Belaunde, a Doe Run official, said data collected before 1997 may not be reliable, and the company cannot use data collected before it owned the smelter in its environmental compliance program.
When Doe Run bought the smelter -- which produces copper, zinc, lead and precious metals -- it was told it would need to spend little a more than $100 million to bring La Oroya into environmental compliance and solve a public health problem.
So far, Doe Run says it has spent $307 million, and that the total cost will end up being $500 million.
The compliance program still has not been completed. Initially, it was expected to take 10 years, but in 2006, the company got a three-year extension and now the government is being asked to grant another one.
Doe Run says the clean up job has turned out to be bigger than it thought.
Critics say it is stalling and that the company's owner, New York billionaire Ira Rennert of the Renco Group, has the money to accelerate the clean up.