Peruvian government stands up to US lead company

International relief and development organization Oxfam America applauded the Peruvian government for rejecting last week US-based lead processing company Doe Run’s proposal to continue operating in the town of La Oroya, ranked one of the 10 most contaminated places in the world.

After months of debate, the government rejected a proposal by Doe Run Peru, a subsidiary of US-based Renco Group, to receive another extension for environmental remediation commitments it made when it purchased the smelter from the Peruvian government in 1997.  The smelter is now temporarily in the hands of a liquidation company, which has reopened part of the plant in compliance with Peruvian government environmental regulations. In the meantime, Doe Run Peru’s creditors are seeking a new operator to take over permanent operation of the smelting complex.

“We are heartened to see Peru’s government standing up for the health of children and workers in La Oroya,” said Keith Slack, global manager of Oxfam America’s oil, gas and mining program. “The government should now ensure that plans are put in place to control toxic pollution to prevent putting the town’s children at risk again.”

According to government studies in 2011, blood lead levels in children have decreased in the two-year period that the smelting operation has been closed due to a financial dispute.  A 2005 study conducted by St. Louis University, in collaboration with the Centers for Disease Control, concluded that 97 percent of the children in the town under age six had elevated blood lead levels.

While the lead smelter may have a new owner, the battle is far from over. Renco Group has filed a $800 million lawsuit against Peru, claiming the government violated the US-Peru Free Trade Agreement. The company filed the arbitration case in December 2010 as one of the several tactics the company is using in their attempt to pressure the Peruvian government to grant Doe Run Peru reprieve from its environmental responsibilities

In April of this year, 18 members of the US House of Representatives sent a letter to Secretary of State Hillary Clinton and Secretary of the Treasury Timothy Geithner expressing their concerns regarding the behavior of Renco Group and its subsidiary, urging US government to refrain from supporting the company in its trade dispute with Peru.

“We believe that the poor environmental record of this company reflects negatively on the image of the United States in Peru and Latin America and jeopardizes the credibility of American efforts to promote responsible foreign investment,” said the letter.

In a separate letter to Peru’s Congress, Rep. Russ Carnahan (D-MO), expressed his concerns over the lead smelter in La Oroya. Carnahan’s district is home to a lead smelter operation owned by the same Doe Run Corporation and its parent, Renco Group. Similar to the smelting operation in Peru, children and families living near the facilities in Herculaneum, MO have been exposed to dangerously high levels of lead. In 2010, Doe Run reached an agreement with the US Environmental Protection Agency to pay $65 million for violating environmental laws, as well as a $7 million civil penalty to pay for environmental remediation.

“The US government should not support companies like Renco Group who misuse investor-state provisions in trade and investment agreements,” said Rocio Avila, program officer for Oxfam America’s oil gas and mining program. “Renco group should listen to the Peruvian people and drop the lawsuit immediately.”