So how much did the Occupational Safety and Health Administration fine Freedom Industries, the company whose sloppy handling of the toxic chemical MCHM caused 10,000 gallons to spill into the Elk River, poisoning the water supply of hundreds of thousands of Charleston, West Virginia residents? Pathetically, a measly $11,000, less than the cost of a single burst appendix helicopter ambulanced in Sierra County. This when 300,000 people had to find alternative water supplies for ten days.
Clearly Freedom Industries isn't even beginning to pay the cost of what they created. In fact, this fine is probably smaller than what it would have cost them to run their facility correctly and avoid the spill in the first place, since one of the problems that OSHA fined them for was a leaky wall that needed to be replaced.
Freedom Industries is not alone in facing regulatory incentives that make short-cuts and safety violations economically attractive. Even giant BP, after running its refinery in Texas City for six years with repeated releases of lethal gasses, and then knowingly running for 40 days with its pollution control system out of operation and no notification of pollution control officials or the neighbors, got away with a $50 million fine, $22,000/day, that almost certainly made running the refinery and releasing hundreds of thousands of pounds of toxic air pollutant the profitable decision.
It’s not like we don’t know how to encourage most people to play by the rules without intrusive inspections or a police state. Many bus and tram systems in Europe don’t check your ticket—except once every ten rides. But the fine for riding without a ticket is, say, 25 times the fare—so even passengers who might be inclined to cheat quickly see that it doesn’t pay—and buy a ticket. But if a bus system checked every ten rides, and the fine was five times the fare—well, do that math. You get a different answer. Lots of free riders.
But we seem to lose track of what we know about human behavior when it comes to those artificial human beings we call corporations. It’s almost as if we take what we know would be an appropriate penalty to make sure you didn’t damage your neighbors and divide it by the size of the corporation—the bigger the company, the weaker the incentive we create for following the rules.
Statute after statute sets penalty limits too small to make compliance the right call for profits. The maximum fine for an auto company that fails to report a safety defect and implement a required recall is only $35 million—that might have gotten Freedom Industries to repair its wall, but it is a tiny fraction of what a timely recall would have cost GM in its current lethal ignition switch scandal. (And remember, many of the vehicles with the defect are no longer on the road, so the current recall is actually costing GM less than a timely one would have.)
And if low penalties aren’t enough, business allies in Congress are busily making it harder to collect penalties once levied—the House Appropriations Committee just voted to block U.S. Environmental Protection Agency from garnishing wages to collect fines from recalcitrant violators.
Do we have some reason to believe that corporations are somehow MORE virtuous than individuals? Not really. Indeed, many of our most prominent business voices argue that a corporation’s only duty is to make money. How does this play out when it comes to following the rules? Early in my work as an environmentalist, I was slipped an internal oil company memo, discussing whether to inform the federal government that a portion of one of its natural fields in the Gulf of Mexico was in federal waters and subject to federal price controls. The memo boasted a complex decision tree complete with % estimates of how likely the feds were to discover the liability on their own, what the oil company’s chances of winning in court were (less than half) and finally what were the odds of jail terms for company employees. Each of these had a dollar value attached, and the final conclusion was—don’t report. I shared the leaked document with federal energy regulators. The oil company observed the price controls.
No company executives went to jail, and at least on the public record, no fine was paid.
Some companies, it seem, are just too big to punish.
Though made in large part of plastic, glass, ceramics, gold and copper, they also contain critical resources. The gallium used for LEDs and the camera flash, the tantalum in capacitors and indium that powers the display were all pulled from the ground — at a price for nature and people.
"Mining raw materials is always problematic, both with regard to human rights and ecology," said Melanie Müller, raw materials expert of the German think tank SWP. "Their production process is pretty toxic."
The gallium and indium in many phones comes from China or South Korea, the tantalum from the Democratic Republic of Congo or Rwanda. All in, such materials comprise less than ten grams of a phone's weight. But these grams finance an international mining industry that causes radioactive earth dumps, poisoned groundwater and Indigenous population displacement.
Environmental Damage: 'Nature Has Been Overexploited'
The problem is that modern technologies don't work without what are known as critical raw materials. Collectively, solar panels, drones, 3D printers and smartphone contain as many as 30 of these different elements sourced from around the globe. A prime example is lithium from Chile, which is essential in the manufacture of batteries for electric vehicles.
"No one, not even within the industry, would deny that mining lithium causes enormous environmental damage," Müller explained, in reference to the artificial lakes companies create when flushing the metal out of underground brine reservoirs. "The process uses vast amounts of water, so you end up with these huge flooded areas where the lithium settles."
This means of extraction results in the destruction and contamination of the natural water system. Unique plants and animals lose access to groundwater and watering holes. There have also been reports of freshwater becoming salinated due to extensive acidic waste water during lithium mining.
But lithium is not the only raw material that causes damage. Securing just one ton of rare earth elements produces 2,000 tons of toxic waste, and has devastated large regions of China, said Günther Hilpert, head of the Asia Research Division of the German think tank SWP.
He says companies there have adopted a process of spraying acid over the mining areas in order to separate the rare earths from other ores, and that mined areas are often abandoned after excavation.
"They are no longer viable for agricultural use," Hilpert said. "Nature has been overexploited."
China is not the only country with low environmental mining standards and poor resource governance. In Madagascar, for example, a thriving illegal gem and metal mining sector has been linked to rainforest depletion and destruction of natural lemur habitats.
States like Madagascar, Rwanda and the DRC score poorly on the Environmental Performance Index that ranks 180 countries for their effort on factors including conservation, air quality, waste management and emissions. Environmentalists are therefore particularly concerned that these countries are mining highly toxic materials like beryllium, tantalum and cobalt.
But it is not only nature that suffers from the extraction of high-demand critical raw materials.
"It is a dirty, toxic, partly radioactive industry," Hilpert said. "China, for example, has never really cared about human rights when it comes to achieving production targets."
Dirty, Toxic, Radioactive: Working in the Mining Sector
One of the most extreme examples is Baotou, a Chinese city in Inner Mongolia, where rare earth mining poisoned surrounding farms and nearby villages, causing thousands of people to leave the area.
In 2012, The Guardian described a toxic lake created in conjunction with rare earth mining as "a murky expanse of water, in which no fish or algae can survive. The shore is coated with a black crust, so thick you can walk on it. Into this huge, 10 sq km tailings pond nearby factories discharge water loaded with chemicals used to process the 17 most sought after minerals in the world."
Local residents reported health issues including aching legs, diabetes, osteoporosis and chest problems, The Guardian wrote.
South Africa has also been held up for turning a blind eye to the health impacts of mining.
"The platinum sector in South Africa has been criticized for performing very poorly on human rights — even within the raw materials sector," Müller said.
In 2012, security forces killed 34 miners who had been protesting poor working conditions and low wages at a mine owned by the British company Lonmin. What became known as the "Marikana massacre" triggered several spontaneous strikes across the country's mining sector.
Müller says miners can still face exposure to acid drainage — a frequent byproduct of platinum mining — that can cause chemical burns and severe lung damage. Though this can be prevented by a careful waste system.
Some progress was made in 2016 when the South African government announced plans to make mining companies pay $800 million (€679 million) for recycling acid mine water. But they didn't all comply. In 2020, activists sued Australian-owned mining company Mintails and the government to cover the cost of environmental cleanup.
Another massive issue around mining is water consumption. Since the extraction of critical raw materials is very water intensive, drought prone countries such as South Africa, have witnessed an increase in conflicts over supply.
For years, industry, government and the South African public debated – without a clear agreement – whether companies should get privileged access to water and how much the population may suffer from shortages.
Mining in Brazil: Replacing Nature, People, Land Rights
Beyond the direct health and environmental impact of mining toxic substances, quarrying critical raw materials destroys livelihoods, as developments in Brazil demonstrate.
"Brazil is the major worldwide niobium producer and reserves in [the state of] Minas Gerais would last more than 200 years [at the current rate of demand]," said Juliana Siqueira-Gay, environmental engineer and Ph.D. student at the University of São Paulo.
While the overall number of niobium mining requests is stagnating, the share of claims for Indigenous land has skyrocketed from 3 to 36 percent within one year. If granted, 23 percent of the Amazon forest and the homeland of 222 Indigenous groups could fall victim to deforestation in the name of mining, a study by Siqueira-Gay finds.
In early 2020, Brazilian President Jair Bolsonaro signed a bill which would allow corporations to develop areas populated by Indigenous communities in the future. The law has not yet entered into force, but "this policy could have long-lasting negative effects on Brazil's socio-biodiversity," said Siqueira-Gay.
One example are the niobium reserves in Seis Lagos, in Brazil's northeast, which could be quarried to build electrolytic capacitors for smartphones.
"They overlap the Balaio Indigenous land and it would cause major impacts in Indigenous communities by clearing forests responsible for providing food, raw materials and regulating the local climate," Siqueira-Gay explained.
She says scientific good practice guidelines offer a blueprint for sustainable mining that adheres to human rights and protects forests. Quarries in South America — and especially Brazil — funded by multilaterial banks like the International Finance Corporation of the World Bank Group have to follow these guidelines, Siqueira-Gay said.
They force companies to develop sustainable water supply, minimize acid exposure and re-vegetate mined surfaces. "First, negative impacts must be avoided, then minimized and at last compensated — not the other way around."
Reposted with permission from DW.