from 26 august 2001
blue vol II, no 1 edition
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Cementing Deals All Over the World
Part 1: Swiss Threat to Ozarks

by C.D. Stelzer



Holderbank's new clothes After a snowfall, the land sloping down to the Mississippi River looks like a rumpled towel, each ravine folding into the next, from Isle du Bois Creek south to Wolf Hollow and beyond. Not a flat spot to be found.

  Doing a Windscale: Another new ID

Human affairs have been limited in these river hills. With the exception of a few small quarry operations, things have remained pretty much the same for the past two centuries. Electricity didn’t arrive in this part of northern Ste Genevieve County, Missouri until around 1950. Before then, towboats and a dwindling number of steam packets relied on kerosene lanterns spotted along the banks to navigate at night. Inland, roads are rare and the woods deep.

That this place - only an hour’s drive south of St. Louis - is still unblemished is no small wonder. Moreover, it is made that much more unique because the land here exhibits two distinct characteristics. The Mississippi lends its inimitable influence through the presence of wetlands, while the hills themselves mimic the Ozark Plateau to the west. The combination of riparian and mountainous terrain creates an awesome diversity in flora and fauna. It is, however, a most delicate of wilderness, and there are signs of destructive change in the offing.

Out on Highway 61, the Beacon Café has expanded in anticipation of a business boom. There's talk of a new quarry and cement kiln. Down the highway a piece, a new asphalt road is being cut up into the hills by a local excavating company. Word has it that the locals are resigned to the project. Indeed, most of them see the investment in the area by a Swiss-based multi-national corporation as a boon to the region’s stagnant economy.

Sixteen miles to the south, at the courthouse in the town of Ste. Genevieve, the county's elected officials are huddled for their biweekly meeting. The 504-square-mile county is governed by three elected commissioners who serve on a part-time voluntary basis. Together they represent 17,000 residents. The topic of the morning's discussion is Holnam Inc.'s plan to build a massive cement plant in the northern tip of the county. The commissioners support the project and note that their constituents feel the same way. Holnam is the North American subsidiary of Holderbank Financière Glaris Ltd., which formally approved the project on Dec. 21, 2000. But the company has been coveting local limestone deposits much longer.

Holnam's warm reception in the county may be attributed to the company's own advance work, including the formation of a citizens' advisory group. Unbeknown to the commission, Holnam, a leading cement producer, had been scouting the area since 1997. Over the next two years, Holnam quietly acquired nearly 4,000 acres of rugged timberland bordering the river.

After they had the property in hand, Holnam struck a deal with the county commissioners to use industrial-development bonds to pay for construction of the $600 million facility. By having the county finance construction, the cement giant gets low-interest financing while reducing future property taxes to the county for the first 20 years of operation.

In return, the county would receive an annual stipend of $2 million from Holnam for the first three years of the plant's operation, with increases thereafter totalling more than $49 million over the next two decades. The county also expects to benefit from the 200-plus jobs that would be created, as well as additional revenue brought in as a result of the plant's $10 million annual payroll.

The deal is even better for Holnam, giving the company access to 2 billion tons of high-grade limestone, enough rock to mine for well over a century. The facility will include a harbor, barge-fleeting depot and rail spur. Negotiations are under way with the Missouri Department of Transportation to build a highway interchange on nearby Interstate 55 to serve the plant. The adjacent cement kiln, which is tentatively scheduled to be fired up in late 2003, would have the capacity to manufacture 10,000 tons of cement daily, or 3 million tons a year, making it the largest cement facility in North America. By comparison, Holnam's cement plant in Clarksville, Mo., has an annual output of 1.2 million tons.

That Holnam takes its directions from corporate headquarters in Switzerland is not unusual. Cement is a global commodity, Eighty percent of the cement industry in the United States is owned by foreign interests, including a few huge European firms. Currently, domestic production, which is operating at full throttle, is still exceeded by demand. Foreign suppliers unloaded 28 million tons of imported cement this year. That amount represents more than a third of the nation's annual cement consumption.

With the recent economic downturn, however, the cement industry is more dependent on the public-works sector to keep it busy in the future. Much of the domestic cement-production increases taking place are tied to the passage by Congress in 1998 of the Transportation Equity Act for the 21st Century, otherwise known as TEA-21. The legislation allocates $218 billion for federal highway construction over a six-year period.

To meet this need, the industry anticipates adding an additional 30 million tons of new capacity, with Missouri targeted for massive production increases. As it stands, Missouri already ranks fourth among cement-producing states.

But there are critical consequences to Holnam's proposal, and government agencies are objecting to it. The U.S. Environmental Protection Agency and U.S. Fish and Wildlife Service have both raised objections, and the Missouri Department of Resources (DNR) is concerned about the proposed kiln’s impact on air quality in the region.

DNR warns that the proposed cement plant could cause ozone levels to jump, thereby jeopardizing the agency's elusive goal of bringing the St. Louis area into compliance with federal Clean Air Act standards. Nitrogen oxide (NOx) is the main component of ozone. According to Holnam's own analysis, its cement kiln would spew 7,000 tons of the pollutants a year.

Ozone damages lung tissue, aggravates respiratory illnesses and fosters respiratory infections. Long-term exposure causes chronic respiratory diseases, according to the EPA, which delegates responsibility for enforcing the Clean Air Act to state regulatory agencies - in this case, the Missouri DNR. Missouri has failed to comply with the statute for more than a decade. This has resulted in a federal lawsuit filed by the Missouri Coalition for the Environment because EPA has failed to downgrade the St. Louis area's status to "serious" non-attainment. Automobile exhaust and industrial emissions are the primary causes of ozone pollution.

DNR is attempting to clean up the air through various initiatives, including an enhanced automobile-inspection program. Though some improvements have been made lately, a single pollution source -- in this case, Holnam's proposed cement kiln -- could prevent the state from reaching its goal. Ultimately, hundreds of millions of dollars in federal highway funds might be withheld from Missouri if the EPA decides to penalize the state. Business groups, including the Regional Chamber and Growth Association and Associated Industries of Missouri, have been lobbying against such sanctions for years. In addition, if the St. Louis area were to be categorized as a "serious" non-attainment zone, it would result in the imposition of stricter and more expensive industrial-pollution controls that could discourage new businesses from starting up in the region.

The proposed Holnam facility in Ste. Genevieve County lies just outside the designated attainment zone, which incorporates seven counties in Missouri and Illinois and the city of St. Louis. If it were inside the zone, Holnam would automatically be compelled to adhere to stricter standards. Nevertheless, the DNR still considers the proposed plant a serious potential polluter. By the company's own admission, the plant would emit more than 20 hazardous airborne pollutants. NOx levels are the major concern. DNR rates any facility that emits more than 250 tons of NOx annually a high risk. Holnam's plant would pump out more than 7,000 tons.

When the DNR factored in Holnam's emission estimates, it showed that the proposed facility would throw the region into serious non-attainment of federally mandated air-quality standards. DNR noted that Holnam's application omits any reference to the installation of available pollution-control devices that would limit the plant's NOx emissions -- the kind of devices used at some facilities in Europe.

Despite being informed in writing that the company's air-quality permit was in jeopardy, Holnam went ahead and announced that it would pursue the project without further delay. In its press release, the company declined to mention any problems it had encountered with the state.

Holnam operates 14 cement plants in the United States. All of them emit vast quantities of airborne pollutants from their smokestacks. In addition to manufacturing cement, some plants serve as hazardous- waste incinerators. Holnam's plant north of St. Louis in Clarksville, for instance, has burned tens of thousands of tons of hazardous waste as fuel since 1986. If the Ste. Genevieve plant becomes a reality, nothing would prohibit the company from burning hazardous waste there. That would cause the plant to emit more dioxins, furans and other toxic substances, adding to the pollution that the plant would inevitably cause. Missouri already holds the dubious distinction of having more hazardous-waste-fueled cement kilns than any other state. In addition to Holnam's plant in Clarksville, the waste burners include Continental Cement in Hannibal, Lone Star Industries in Cape Girardeau and River Cement in Festus.

Cement kilns started using hazardous waste as fuel in 1984, after the U.S. Congress amended the Resources Conservation and Recovery Act. The loophole allows cement producers to accept hazardous waste without having to go through the same regulatory process as a hazardous-waste incinerator. This is doubly profitable for cement manufacturers, because they receive payment from hazardous-waste producers for accepting the waste and then turn around and use it as an alternative fuel.

Holnam's abysmal environmental record stretches from one end of North America to the other. In September, Colorado officials discovered that a smokestack at Holnam's LaPorte plant was emitting two times the permissible amount of pollution, according to press reports. In this case, state regulators limited the testing to just one of the plant's 100 smokestacks. At Holnam's headquarters in Dundee, Michigan and other plants, the company burns tires as fuel. Studies by the Michigan Department of Environmental Quality have shown that levels of heavy metals such as mercury rise when tires are used to stoke a cement kiln. In 1993, the Texas Air Control Board fined Holnam's facility in Midlothian $135,000 for excessive sulfur dioxide emissions. A year earlier, Canada's Ministry of the Environment forced Holnam's parent company, Holderbank, to stop burning chlorinated waste at its plant in Mississauga, Ontario, after residents complained about high emissions of heavy metals, dioxins, PCBs and hydrochloric acid.

Holnam sales grew by a respectable 6 percent in the first six months of last year. Holderbank, now Holcim,the parent company, did even better worldwide, raking in hundreds of millions in profits from its operations in more than 60 countries in Europe, North America, South America and Asia. Most of the Holderbank billions are still under the control of the Schmidheiny family of Zurich. The company's CEO is Thomas Schmidheiny. His junior brother Stephan Schmidheiny, also an heir to the cement dynasty, has branched out in other enterprises, such as Swatch watches. In the last decade, Stephan has found an avocation in seeking to raise environmental consciousness among global industrialists. The younger Schmidheiny led the business delegation at the United Nations-sponsored Earth Summit held in Rio de Janeiro in 1992. This led him to form what became the World Business Council for Sustainable Development, a group that includes such major polluters as Dow, DuPont and Shell Oil. The purpose of the organization is to promote "eco- efficiency," a melding of capitalistic and environmental goals.

Judging by the scale of Holnam's proposed cement plant in Ste. Genevieve County, it doesn't appear that "eco-efficiency" was ever taken into consideration. Holnam has taken great strides, though, to coordinate its efforts closely with the U.S. Army Corps of Engineers, which is responsible for protecting inland waterways . Those efforts have already paid off. Last fall, the Corps granted Holnam permission to begin building its access road over two streambeds at the site, even though the agency has not yet consented to the construction of the facility itself. The latter application, which is now under review, includes a study of the site's natural characteristics and the potential environmental impact that the project would have on the area.

Two federal agencies, as well as environmentalists, have used the Corps' public-comment process to register their criticism of the plan. Opposition is being spearheaded by attorney Yvonne Homeyer of the Webster Groves (Missouri) Nature Study Society and Maxine I. Lipeles, a lawyer and director of Washington University's Interdisciplinary Environmental Clinic. The Missouri Coalition for the Environment and the Sierra Club are lending their support to the cause. .

"The big picture is, there are 4,000 acres of basically undisturbed property," Lipeles says. "I think it's the largest undisturbed piece of property on the Mississippi River between St. Louis and Cape Girardeau. It's rich habitat, and it's spectacular. People with scientific training that we've been able to speak with who have actually seen the property become poetic when they describe it. They start talking, and they're overwhelmed. What we've got is a very unique unfragmented forest. I do not know of any other unfragmented tract in eastern Missouri, outside of the Ozarks. That, in and of itself, makes it unique habitat."

Holnam's permit application lists five endangered species within the range of the site, including the pallid sturgeon and bald eagle. The company's permit application says it will begin restoring the land after 10 years. But it doesn't mention how the destruction of aquatic habitat would be mitigated. Critics note that the project would destroy more than 16 acres of wetlands, most of which would be taken to build a harbor. In addition, they believe the 2,000-acre quarry will have a negative impact on eight seeps and 25 springs at the site, plus a variety of threatened flora and fauna, including neo-tropical migrating songbirds, such as the cerulean warbler, which are on the decline. Foes of the project contend that upsetting the habitat of one species can have a domino effect on the entire ecosystem. For these reasons, among others, opponents of Holnam's plan, including the EPA, are asking the Corps to take a closer look at the proposed site and prepare a formal environmental-impact statement, or EIS.

In its public comments to the Corps, earlier this year, the U.S. Fish and Wildlife Service summed up its opposition this way: "The proposed site consists of a large contiguous tract, with wetlands, caves, large river, streams, hollows, ravines and glades. The proposed project would convert these relatively undisturbed areas into heavy industry. The proposed project will have irreversible impacts on these habitats and the plant and animal species that utilize them. We believe that the proposed mitigation is inadequate, especially for the aquatic and upland habitat. Therefore, we recommend that the Corps deny the project as proposed."

Homeyer, of the Webster Groves Nature Study Society, compares Missouri's circumstances to that of a Third World country: "I used to live in Nicaragua, and I've seen how these companies come in and use up resources -- they don't pension out their workers, they just get up and leave. You're talking about a foreign company that's going to take the profits out of the U.S. back to Switzerland. That's all Holnam is here for. It's a U.S. subsidiary to ship the profits back to Switzerland. They're going to create, at most, 200 full-time jobs, and for that we're going to have dirty air, ruined habitat and loss of wildlife. I don't see how anybody can get excited about this except Holnam. Who else serves to gain except Holnam? Where is the benefit to Missouri? I don't even see it on paper."

On the high end of Brickeys Hollow, where the scree begins to peter out, four turkeys dart across the road into a stand of scrub oaks. The only sound that can be heard is gravel churning under the snow as a pick-up truck's tires roll along the rutted path. This place was colonized by French settlers in the 18th Century. They came up the river from New Orleans. In the town of Ste. Genevieve, which is named after the patron saint of Paris, dozens of French colonial houses still stand as a tribute to these hearty pioneers. Outside of the town proper, though, most of the county’s land is devoted to agriculture, except for the rugged hills along the river. Some of the trees that grow in the gullies are hundreds of years old. They were mature when colonists arrived.

Their future now is very much in doubt.

- C.D. Stelzer


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