Hydro admits to spills in Brazil

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Norwegian industrial firm Norsk Hydro has confirmed a series of unlicensed “release” of what it calls “excess rainwater” from its large aluminum plant in Brazil last month. Others including newspaper Dagens Næringsliv (DN) call the release “ulovlige utslipp” (illegal spills) that are suspected of having polluted local water supplies and left the Oslo-based company dealing with one of its biggest crises ever.

Oslo-based Norsk Hydro insists that there were “no leaks of overflow” from the bauxite residue deposit areas herer at its Alunorte aluminum plant in Brazil. This photo was taken during a recent inspection following heavy rains last month. PHOTO: Norsk Hydro

The pollution allegedly caused by Hydro in Brazil is turning into a national embarrassment since the major aluminum producer is among Norway’s largest companies in which the state has a major ownership stake. Norwegian firms including Hydro pride themselves on “safe and sound operations,” with Hydro CEO Svein Richard Brandtzæg claiming just two weeks ago that his company’s commitment to such was “universal and absolute.”

DN has been publishing almost daily reports on Hydro’s serious trouble in Brazil since it began last month. On Sunday afternoon DN reported that now, after Brandtzæg quickly traveled to Hydro’s Alunorte plant in northern Brazil and investigations were launched, the company has confirmed several spills from a canal that lies alongside a filtration facility inside the plant’s refinery area. At issue is whether bauxite residue deposits from containment basins at the plant seeped into local water supplies.

In its own version of the “rainwater release” (external link), Hydro insists there are “no indications of leaks or overflow from Hydro Alunorte’s bauxite residue deposit areas,” nor is there any indication “of negative enviromental impact form the release.”

Hydro CEO Svein Richard Brandtzæg quickly traveled to his company’s aluminum refinery in northern Brazil, after accusations that it had polluted the local drinking water. PHOTO: Norsk Hydro

Hydro’s information director Halvor Molland wrote in an email to DN on Sunday that the spills were “controlled” and carried out in order to relieve pressure on its containment basins and filtration systems following heavy rains in February. Molland admitted that the “controlled” drainage was made without a license, but that local environmental authorities were informed.

Hydro’s Alunorte plant did not warn the local community, however, about its release of the bauxite residue deposits known as “red mud.” Hydro is thus left to deal with the prospect that drinking water supplies were polluted for several hundred families, while Hydro also was forced to cut production at its important Alunorte plant by half. The company also faces heavy fines, threats of more, and nearly 2,000 employees at Alunorte now fear for their jobs.

The crisis at Hydro’s Alunorte plant, which ranks as the largest aluminum refinery in the world, has also alarmed investors and analysts who follow Hydro, which otherwise has reported strong earnings in recent years. Brandtzæg had just released more good results for the company before the problems in Brazil emerged last month. Molland confirmed that the first “controlled” release of the potentially toxic muddy water was carried out on February 17, followed by several other “periodic” illegal spills from February 20-25.

Hydro’s CEO also donned a local work uniform and spoke to and with employees. PHOTO: Norsk Hydro

Hydro’s admission comes after DN interviewed researcher Marcelo Lima of the Evandro Chagasm Institute, which has tried to conduct several inspections at the Alunorte plant. Local newspaper Diário do Para has also covered Lima’s report on spills from the plant, with Lima claiming that foreign companies like Hydro, which earn millions on exploitation of Brazil’s natural resources, should do more for the local communities. “If there’s a problem with water supplies to the local population, it should be possible to mount a public-private cooperation to improve them,” Lima told DN.

Hydro’s CEO Brandtzæg was quick to visit local residents when he arrived in the Para area of northern Brazil where Hydro’s plant is located. He acknowledged that they “live under difficult conditions” and that both adults and children were” scared (after many fell ill after last month’s heavy rains) and we take that seriously.”

Hydro quickly organized delivery of bottled water for the community after a local court ordered Hydro to cut production at the plant by half. Brandtzæg called the situation in Brazil “the most serious I’ve had in my time as chief of Hydro.”

Hydro started delivering bottled water to local households as the crisis at its Alunorte plant developed. PHOTO: Norsk Hydro

He also claimed, though, that there still was no proof that the plant polluted the drinking water, noting that drinking water supplies and a sewage plant “lie side by side” in the community, and that he’d been told by doctors that the heavy rains blended the two. “There’s also a large garbage facility nearby … that’s also dangerous for drinking water,” Brandtzæg said.

These may be the kinds of local problems, referred to by Lima, that Hydro could have helped address earlier. Meanwhile the company claims it never intended to withhold information and noted that investigations into its operations were continuing. Molland claimed that bauxite deposits in the water “are not dangerous themselves” and that there “are no indications this has been environmentally damaging, but we will now go through this.”

Brandtzæg set up a rapid response team that reports directly to him. DN reported that its members flew to Brazil late last week, while Hydro also has hired an external consulting firm to make an independent evaluation of the situation. Lima told DN that Hydro’s officials at Alunorte were not cooperative when he first was asked by local authorities to investigate the aftermath of the heavy rains in mid-February. “They refused to show us areas we wanted to examine,” he told DN. “When we asked where a pipe was, they wouldn’t answer.”

Molland did not dispute that: “There are many comments from Lima that we can agree with, and we want to be a long-term player in the region and develop the community around us. We are therefore going thoroughly through the entire situation, to see what we can improve.”

Norsk Hydro’s stock was among the most heavily traded on the Oslo Stock Exchange Monday morning, and down just over 2 percent at mid-day. The company also faces uncertainty regarding US President Donald Trump’s controversial extra import fees on aluminum, but notes that its exports to the US are relatively small and come mostly from plants in Canada and Qatar.

newsinenglish.no/Nina Berglund