Paying the PCB Piper
Subsidized U.S. company threatens to close Canuck plant unless border opened
by Charlie Angus
HighGrader Magazine March/ April 2000

Less than two years after receiving a $1.25 million gift from Canadian taxpayers (courtesy of the now notorious Jobs Transition Fund), Trans Cycle Industries (TCI) of Pell City, Alabama is threatening to pack its bags and move back south of the border.
The Feds gave the money in May 1998 to help TCI set up a PCB-recycling plant in Kirkland Lake, Ontario. At the time, the plant was heralded as a means of cleaning up regional industrial waste. Once in operation, however, the other shoe dropped and TCI announced its intention to transform the Kirkland operation into an international destination for PCB-contaminated waste (see PCBs'R'Us HighGrader Sept/Oct.99).
On Christmas Eve, Ontario's Ministry of Environment and Energy (MOEE) gave the plan a big two thumbs down. TCI said it's "astonished" by the ruling. Equally astonished are TCI's opponents. They point out that, until this ruling, the rejection rate at the 'open for business' MOEE was running at "basically zero".
Not taking the rejection lightly, TCI has slammed the decision as a "slap in the face". They have threatened to close their Kirkland operation if the ruling isn't overturned.
In job-starved Temiskaming, the TCI case has turned into a tribal affair, with lots of municipal drum beating and chest pounding to defend local jobs.
Local politicians are looking to pressure the government into striking down any appeal ruling that might go against TCI. This despite the fact that the MOEE ruled the project could "result in a hazard to the health or safety of the public" and was therefore "not in the public interest".
Critics, both locally and internationally, maintain that the debate about local jobs obscures the much bigger issue - Canada's place in the international trade in toxic waste.
Foot in the Door
When TCI president David Laskin first appeared in Kirkland Lake in late 1997 his company was sitting on a major contract with the U.S. Overseas Service to handle PCB-contaminated waste from American bases in Japan.
The 130,000 kilos (as later reported in the Globe and Mail) signaled the beginning of a potentially huge windfall from U.S. military bases in Guam, South Korea and the Philippines.
And the Japanese contract was just the tip of the toxic iceberg. The international market in PCBs could prove very lucrative.
The only problem was finding a willing host country. The good old US of A was out of the question. Congress had firmly closed their border to all imports, even the waste manufactured at U.S. bases overseas. Canada, however, could be another matter.
Although there was no Canadian company importing PCB waste, the firmness of the border was in question.
But when Laskin arrived in Kirkland Lake, he wasn't talking about international imports. Rather, he waxed on about the economic potential of region.
Laskin stated that Kirkland Lake was "a central location" for dealing with customers "in the mining and pulp and paper industries".
In a region beset by chronic, high unemployment, TCI's promise to create 68 jobs was seen as manna from heaven.
"We were dying for any new business at all," says one local businessman, "I guess it's a case of 'beware of Greeks who come bearing gifts.' They [TCI] came in and were very sophisticated. We went down and saw their operation in Alabama. We were impressed by their pitch. But I don't remember any talk about the plant taking waste from elsewhere. I was under the impression it was going to serve regional needs."
The Feds, eager to get the project off the ground in a Liberal riding, came calling with an impressive welcome wagon package -- a cheque for $1.25 million. The money came out of what is now being called the Billion dollar Liberal bondoogle -- the Transitional Jobs Fund.
In May 1998, TCI asked the MOEE for a license to deal with metals from within Canada. No mention was made of potential overseas business.

Minor Amendment
After only a year in operation, the cat was out of the bag. TCI was crying the Kirkland Lake blues -- business wasn't good, lay offs were looming and the only way to make the Canadian branch plant viable was to open the border and allow TCI to make good on its deal with Japan.
TCI approached the Ministry of Environment to amend the company's certificate of approval so that it could go after waste from the 27 industrial powerhouses that make up the OECD. As well, it wanted the green light to knock on the doors of the 130 countries who were signatories to the Basel Convention on the international transport of toxic waste.
TCI lawyer Michael Zarin says the company had always planned to look at international imports to the Kirkland operation. He describes the move to amend the company's environment certificate as minor.
The Ministry of Environment apparently didn't see things this way. On Christmas Eve TCI became the first waste-import plan to be turned down since the Tories took office.
TCI has denounced the decision as a "political, knee-jerk reaction." And if the government doesn't blink in the appeals process, TCI is threatening to pack its bags and go home.
If TCI were to leave, it's unclear what would happen to the $1.25 million hand out given through Human Resources Development Corporation (HRDC).
HRDC spokesperson Suzanne Dupont speaking from the Timmins office, says she is unaware of any action the Federal government could take to reclaim its "contribution" if the company pulled up stakes.
"If the company moved out of the area, I'm not aware of what we could do. Personally, I don't see how HRDC can run after a sponsor."
Brennain Lloyd, of the northern environmental group Northwatch, says this isn't good enough.
She believes that Canadian taxpayers are being asked to subsidize an American company looking to use Canada for waste importation. Says Ms. Lloyd, "This really raises the question about accountability in spending public money."

No Jurisdiction
The threat to close the plant has galvanized politicians in Kirkland Lake to go to bat for TCI. Even Temiskaming MPP (Liberal) David Ramsay has come onboard. Although he says its very unlikely that TCI would leave, he nonetheless has made it clear he will do what he can to help ease the restrictions on TCI's import market.
Ramsay says he is concerned about the job situation in Temiskaming and will approach Cabinet about changing the rules should the MOEE appeals process again rule against TCI.
"We'll wait and see what the appeals process says, but I'm prepared to take the case on and approach the Minister and ask him to review the policy."
Interestingly enough, TCI is basing its case on the assertion that the MOEE's decision "exceeds the authority of the Ministry of the Environment of Ontario".
Brennain Lloyd believes that it's an attitude such as this that may have "ticked off" people within the Ministry. She accuses TCI of being "high handed" in their dealings with Canadians and thinks the company may have alienated staff at the Ministry.
Another industry watcher, however, believes that the MOEE recognized that TCI was handing it a very hot political potato. If the Province agreed to the amendment, the issue would still have to go before the Feds who have jurisdiction over the border.
The Feds would have little to gain politically from opening the border to waste imports from around the world. As well, it could have embroiled the Feds in an inter-provincial backlash as the final waste from Kirkland Lake was scheduled to go to the Swan Hills incinerator in Alberta.
Seen in this light, it is quite possible that the MOEE, who have been much maligned for their lax standards, ix-nayed the plan rather than risk the public-relations disaster that would ensue if the Feds kicked the bucket out from under the plan.

International Picture
With an appeal looming, TCI's spin is that of the wounded north once again being put upon by southern bureaucrats. Speaking from his office in Westchester, New York, Michael Zarin explains, "It's an oddity for a company that deals in international commerce to have part of its market arbitrarily withdrawn. I don't know if other Canadian companies have that limitation, maybe that's just the way they treat Northern Ontario....I would submit that it's a slap in the face to Kirkland Lake and other Northern Ontario communities."
The Basel Action Network, a U.S.-based NGO which monitors the international traffic in toxic waste doesn't share Zarin's perception.
Spokesman Jim Puckett speaking from Seattle Washington, says it is "outrageous" to suggest this amendment is a minor adjustment.
Puckett says the plan has serious implications for the international trade in toxic waste.
"What they are doing is opening the door from one country to 130 countries. If you take just the OECD countries, that accounts for about 85% of all the PCB's in the world. Then if you throw in all the Basel countries, which has a membership of about 130 countries, there are really very few countries left (that wouldn't be part of TCI's market). This (amendment) would open their market by magnitudes. It's not a minor issue at all."
Puckett says the plan cuts at the very heart of the Basel Convention which was set up in the 1980s to monitor the international movement of toxic waste and to prevent rich countries from dumping waste on poor countries.
Michael Zarin, however, maintains that the plan is in very much in keeping with the spirit of the Basel. "Canada is a signatory to the Basel Convention," explains Zarin, "and it permits the importing and exporting of hazardous materials including PCBs between Basel countries."
Puckett interprets the Convention differently. "The Basel Convention says that toxic waste is not a typical commodity. There is a principal of national self-sufficiency that says that each country should take care of their own waste. According to international law and the international community, it isn't an acceptable practice for TCI, or any other company, to be bringing PCB waste to the rest of the world."
Puckett rejects the claim that because TCI recycles the metals and transformers it should classify as a non-importer of toxic waste .
"The reason TCI is making money is because the metals are contaminated with some of the most hazardous substances on the planet. That's where the money is. I'm sorry, these guys aren't scrap dealers."
Puckett believes that if TCI is successful it could allow many rich countries to simply export their problems to Northern Ontario.
"There is a huge market out there in PCB-contaminated waste. And who is going to stop a successful company from expanding to meet this market?"
Michael Zarin, however, would prefer to keep the issue strictly focused on Northern Ontario
"We came into Kirkland Lake hoping to put Kirkland Lake on the international map...and the government's decision based on a two sentence (decision) - 'not in the public interest' - will put this plant in risk of closing."

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