JULY/AUGUST 1996 · VOLUME 17 · NUMBERS 7 & 8

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T H E    F R O N T

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AFTER NEARLY TWO YEARS of review, the U.S. Export-Import Bank denied support to U.S. corporations chasing contracts for China's Three Gorges Dam at the end of May. Caterpillar and Rotec Industries of Illinois and Voith Hydro of Pennsylvania had hoped for letters of intent for loan guarantees from the Ex-Im Bank which would enable them to submit formal bids to sell China construction equipment for the dam.

Ex-Im Bank President Martin Karmarck said in a May 30 statement that the Bank's board "has concluded that Ex-Im Bank cannot issue a letter of interest for this project at this time. The information received [from China], though voluminous, fails to establish the project's consistency with the Bank's environmental guidelines."

If completed, the Three Gorges Dam would stretch nearly a mile across and tower 575 feet above the bed of the Yangtze. Its reservoir would stretch over 350 miles upstream and force the displacement of 1.3 million people. It would be the most powerful hydroelectric dam in the world. Construction began in 1994 and is scheduled to take 20 years [See "Planning for Disaster: China's Three Gorges Dam," Multinational Monitor, September 1993].

In March 1991, opposition to the project in China forced the suspension of the dam, but Premier Li Peng swiftly resurrected the project in the aftermath of the Tiananmen Square massacre.

Environmental organizations warmly applauded the Ex-Im Bank announcement.

"This is phenomenal," says International Rivers Network Executive Director Owen Lammers. "It represents a serious blow against what would have become the world's most socially and environmentally ruinous dam."

According to Kamarck, "the major (though not only) issues of concern" for Ex-Im were reservoir quality, the endangered species and other "ecological resources" threatened by the project, the "environmental and socioeconomic impacts associated with the proposed resettlement of 1.3 million people" and the "protection of cultural resources."

The Chinese government has had numerous problems finding foreign financing for the dam, estimated to cost up to $75 billion. The World Bank, the leading international funder of large dams, has for some time stated that it will not help fund the project. An international bond offering first scheduled for release in April 1994 has been delayed indefinitely due to concerns within the investment community over the financial risks inherent in the dam. Kamarck stated that financial considerations did not enter into Ex-Im Bank's decision to refuse to back U.S. companies hoping to supply the Chinese dam-building effort, however.

In its response to the Ex-Im announcement, Caterpillar ignored the substantive basis for the decision, framing the issue solely as one of U.S. jobs.

"America's export competitiveness has suffered as a result of [the] decision by the Export-Import Bank," says Caterpillar Group President James Owens. "Without competitive export financing from the Ex-Im Bank, American companies such as Caterpillar will now be at a significant competitive disadvantage when competing for business against Canadian, European and Japanese companies."

U.S. companies remain free to sell their wares to China for the Three Gorges project in the wake of the Ex-Im announcement, although they will not get government support to do so. Owens says, "We will continue to do our best to convince China to buy American-made products."

China wants foreign equipment suppliers to arrange cheap loans to pay for their equipment from their national export credit agencies. With the United States declining interest, international attention will now focus on the export credit agencies of Canada, Japan, Germany and Switzerland, all of which are considering providing credits.

"We hope that these other countries reach the same conclusions as the United States," says International River Network's Lammers. "Without international financial and technical support, it will be very hard for the Chinese government to complete the dam. Opponents of the dam within China will stand a far greater chance of stopping it."

In his May 30 statement, Kamarck emphasized that the Ex-Im Bank's announcement was specific to the Three Gorges project, and that the Ex-Im Bank expects to finance other projects in China. "Given [the] long history of Ex-Im Bank's support for U.S. exports to China, and the fact that China's demand for goods and services will continue to grow with their economy, Ex-Im Bank looks forward to continuing a strong partnership with our Chinese friends," he said.

Kamarck also said that Ex-Im would reconsider its decision if China and the U.S. suppliers could provide new information to help satisfy the export agency's concerns.

-- Patrick McCully

Hunger Striking DuPont

YIELDING TO PLEAS from her family, Diane Wilson, a fourth generation shrimper from Seadrift, Texas, ended on July 5 a 31-day hunger strike intended to force E.I. DuPont de Nemours Corporation to agree to an independent study of whether zero wastewater discharge from its Victoria, Texas facility is feasible.

While DuPont did not agree to her demands, Wilson and her supporters claim the hunger strike was a success, and vow to maintain pressure on DuPont to adopt a blanket zero-discharge policy at all its facilities.

Wilson says she began the hunger strike in response to a decision by the DuPont facility, which currently disposes of 20 million gallons of wastewater a day mainly through seven underground injection wells, to seek permits from the Texas Natural Resource Conservation Commission (TNRCC) to dispose of up to 85 tons of toxic pollutants a year into the Guadalupe River, which flows into the San Antonio Bay. Wilson, the founder of Calhoun County Resource Watch, has shrimped the bay since she was a child.

"I make my living on San Antonio Bay as a fisherman," Wilson said. "DuPont's decision to begin toxic discharge into the Guadalupe River threatens an already sick bay. There is no need for this. Zero discharge is possible right now. All I am asking is that DuPont do a feasibility study to find out what it would take to achieve zero wastewater discharge from its Victoria plant."

DuPont refused to accede to Wilson's demands. "We firmly believe that Ms. Wilson's concerns about the impact on the Guadalupe River and its bays and estuaries have been addressed in the project design," wrote plant manager Dennis Broughton to a number of environmental organizations. "An important aspect of our planning has been two years of ongoing dialogue with the community. This dialogue has been extensive, including regular discussions with our plant's Community Advisory Panel."

Asked while the hunger strike continued about the possibility Wilson might get sick or die, DuPont attorney Adele Buchman said, "We feel terrible that she has chosen this way to express herself and we hope she doesn't get sick."

"But she is an adult and she has done this before," Buchman said. "That is her choice. It is a regrettable choice."

DuPont continued to refuse to consider a study of the zero-discharge option even as as Wilson repeatedly confronted the company during the hunger strike.

In late June, while handing out leaflets reiterating her call for a zero-discharge study at a $1,000-a-plate dinner in Washington, D.C. at which DuPont chair of the board Edgar Woolard, Jr. was honored for the company's environmental record, Wilson and two supporters were arrested.

Later that month, and into the fourth week of her hunger strike, Wilson maintained a daytime vigil outside of the chemical giant's Wilmington, Delaware headquarters.

"We always knew there was a strong possibility that DuPont would not care if Diane died," says Chris Bedford, national coordinator of Communities Concerned about Corporations (CCC), a group which supported Wilson. "After a month of contact, DuPont continued to stonewall Diane's request, citing an ever changing series of reasons why they would not respond."

Buchman says that Wilson is wrong about the facility applying for a permit to dump 85 tons a year of toxic wastes into the Guadalupe River. But when asked about what will be dumped into the river under the permit, Buchman says she does not know.

DuPont says it is investing $100 million in the Victoria facility to "eliminate and destroy waste, recover and reuse valuable manufacturing materials, create new products and treat and recover three million gallons of waste a day in an above ground, state-of-the-art biological treatment facility."

Under the program, "the waste that we used to generate are not going to be generated anymore," Buchman says.

"Diane Wilson is concerned about the bays," Buchman says. "But we look at the total environment. If you don't return the water to the river, you have to evaporate it. When you evaporate the water, you wind up with solids that have to be landfilled. It will eventually rain down again. We looked at the total thing. This way we don't use up any landfill."

Wilson has won independent zero water discharge studies at two other Calhoun County facilities -- the Formosa Plastics PVC Plant and Alcoa Aluminum's Plant at Point Comfort, Texas.

These studies have been supervised by Dr. Jack Matson of Penn State University, a former chair of the Texas Air Control Board. Under the agreements, Alcoa agreed to spend over $3 million to eliminate the process wastewater discharge from its plant and Formosa agreed to close the wastewater loop at its facility.

"In our experience, the internal engineering and environmental staff of a petrochemical corporation only considers certain narrow options when it comes to waste disposal," says Chris Bedford. "That's just part of the nature of command and control organizations, particularly in a time of downsizing. We believe the whole process benefits from an outside, independent perspective. Jack Matson has demonstrated that virtually any petrochemical plant can go to zero water discharge with an additional capital investment of about 2 percent."

CCC activists say Wilson's hunger strike has galvanized a national network, called the DuPont Zero Discharge Network, of groups in communities where DuPont facilities are located to demand a company-wide zero discharge policy.

"Diane's hunger strike was a success," says Diana Anderson, CCC treasurer. "We knew DuPont might not agree to her demands right away. But we also knew that Diane's action could help create a nationwide campaign to get DuPont to go zero discharge. Our strategy was to push DuPont as hard as we could and still keep Diane alive."

-- Russell Mokhiber