||Clean Water Action
Citizen Comments on the G-P Settlement
Help Clean The
River and Bay!
government lawyers now admit that the G-P settlement is worth only $10.86
million, not the $16.1 million which was claimed to the news media.
The public was told a highly inflated value.
August 3, 2002
Assistant Attorney General
Dear Sir or Madam,
We are writing in regard to: The United States and the State of Wisconsin v. Fort James Operating Company (Georgia Pacific Corporation), Civil Action No. 02-C-0602 (E.D. Wis.), and DOJ Reference Number 0-11-21045/1.
This consent decree hurts Clean Water Action Council’s members by not adequately compensating for damages caused by PCBs discharged by Georgia-Pacific Corporation (G-P).
We request that it be increased to $75 million, which is Georgia-Pacific’s 22.5% share of the $333 million in damages reported by the U.S. Fish & Wildlife Service and co-trustees in their final “Restoration and Compensation Determination Plan” (RCDP) released in November, 2000. This plan cost roughly $10 million and 7 years to prepare, and utilized more than 80 world-class experts. The plan’s conclusions should not be abandoned. The $333 million was a conservative minimal estimate which does not include major types of economic losses. This figure must not be further compromised.
In addition, we request that the public comment period for this individual settlement be extended to 30 days after the public release of the proposed final NRDA Restoration Plan, which is the overall plan for all the responsible corporations, and EPA’s final Record of Decision (ROD) on the Fox River and Green Bay sediment cleanup plan. It is impossible for citizens to fully evaluate and comment on this individual consent decree without knowing the comprehensive situation it should fit into. The two larger decisions are due within just a few weeks or a month, so our request for a comment extension would not require a significant delay.
In addition, a public hearing should be held to allow public debate and discussion of the consent decree’s impacts and the agencies’ negotiating stances.
Clean Water Action Council of Northeastern Wisconsin, Inc. is a registered non-profit, educational, charitable organization based in Green Bay, Wisconsin. We have approximately 850 regular members and many thousands of occasional donors throughout Northeast Wisconsin, from Sheboygan and Fond du Lac, north to Marinette and Door County.
Many of our members use the Fox River and Green Bay for recreation, food, water, wildlife conservation, and economic base, and have suffered significant losses over several past decades due to PCB contamination.
Future damages will also be significant. The river sediment cleanup plan proposed by the DNR and EPA will take several decades to greatly reduce river PCB contamination, and the agencies have planned no PCB cleanup in the bay. Scientists predict that PCB contamination could continue in the bay at or above fish consumption advisory levels for more than 100 years into the future, because roughly 70 to 80% of all the PCBs discharged into the Fox River have already escaped the river into the bay, the air, and Lake Michigan. Because PCBs are highly persistent, they are expected to continue circulating in the system indefinitely, long after the agencies’ computer models end their predictions.
The agencies also state that even with the proposed river cleanup, the fish advisories may not be lifted on the last 7-mile stretch of the Fox River for 45 years (from the De Pere Dam to the mouth of the river.) We suspect the wait will be longer, because the fish move freely from the lower bay into the river, and the bay won’t recover for more than 100 years.
In other words, the sediment cleanup, while needed, will not restore the river or bay to minimally healthy conditions any time soon. It’s not enough to support only the cleanup plan. We, the public, must receive significant additional compensation and restoration funds to make up for our past losses and continuing damages in the years to come. Several lifetimes of river and bay use have been damaged. We have a right to expect compensation and restoration activities around the Bay which fully match the $333 million value, at the very least. Only then can our members feel that the damages have been compensated for.
Other Major Concerns
While we're anxious to get these issues resolved in time for cleanup and restoration to start in the spring of 2003, we oppose this low settlement for several reasons:
1. The state is leading, but doesn’t support compensation --- It is an outrage to have a reluctant regulator in charge of this settlement, when we need tough negotiators pushing for the maximum they can gain from the polluters. DNR staff at several levels have stated on many occasions over the years that the agency does NOT want to pursue an NRDA, and does NOT support the public’s right to compensation for PCB damages. They believe settlement dollars should be reserved exclusively for sediment cleanup. Yet this same agency is now leading the NRDA compensation negotiations with the polluters.
When the DNR couldn’t stop the federal government from pursuing an NRDA, the DNR chose to sabotage the federal effort by writing a competing state NRDA using industry consultants who were guaranteed to minimize damage estimates. Then, the DNR pursued pre-emptive settlements with the corporations, knowing full well that this could ruin federal attempts to achieve better results.
During the Clinton Administration, we felt the federal government was the public’s champion on this issue, and was doing its best to pursue a decent, though conservative, settlement, despite the state’s sabotage. Now, under the Bush Administration, the federal agencies seem to have abandoned their own work and are simply going along with the state’s decisions. The public no longer has a compensation advocate in the agencies on this issue.
2. Too many surprises --- We don’t believe the state should be allowed to enter into surprise settlements with polluters, until the public has been fully informed on the issue, has been presented with options, public hearings have been held and the government has received comments from the public on those options. The DNR has entered into 4 such settlements involving millions of dollars, 3 of which have resulted in poor outcomes for the public interest:
a. The $10 million settlement contract announced January 31, 1997 between the state and 7 paper companies who dumped PCBs in the Fox River. (The $10 million was never turned over to the state, and we don’t have an accurate accounting of how the money was spent.) This was a horrible deal for the state and has caused nothing but trouble. $7 million was used for a completely inept dredging “demonstration” project in Green Bay at Site 56/57. (Because it was so messed up, the EPA had to step in and force a consent decree to fix it.) Most of the remainder was for the paper industries to select consultants (who they would have hired anyway) to write pro-industry computer models and position papers to be the basis of a state NRDA. This served the polluters, not the public interest.3. Biased consultants --- We are outraged by the DNR’s flagrant use of biased consultants chosen by the polluters. We do not believe these consultants serve the public interest, and the state should not be embracing and endorsing their work. Three key DNR consultants involved with the Fort James announcement were:
a. Dwight Duncan, from Price Waterhouse Coopers. He is the DNR’s front man who supposedly is providing “independent” evaluation of computer models created by Triangle Economic Research and experts working for the U.S. Fish and Wildlife Service. But he should be disqualified from this task:
b. Keith Eastin, from Deloitte and Touche, a well-known consulting firm with strong ties to the pulp and paper industry. The DNR has deliberately tried to hide his corporate ties by highlighting his EPA role under the Reagan Administration, but this also is not high praise, given that Administration’s well-publicized hostility to the Superfund and CERCLA programs. In addition, the NRDA rules have changed substantially since his work with the government; therefore, his more recent work for Deloitte and Touche is more relevant.It seems that several DNR staff have been moved off the project when they disagreed with decisions DNR is making on this issue. For example: Betsy David is a PhD economist who worked for DNR for 23 years. We’ve heard that she was transferred to a different DNR department after she disagreed with some of the findings of Dwight Duncan or TER. She was afraid to talk with us, would not answer questions, or provide any information --- she only confirmed that she used to, but no longer worked on the issue. She has since left the DNR and Wisconsin altogether.
4. Sabotaging the federal case --- The state has repeatedly undercut the federal government’s efforts to enforce the law and gain compensation for the public.
The Fox River Group and the Wisconsin DNR have also claimed that a federal court has ruled that Contingent Valuation is not a valid method, based on a pollution case in Montrose, California. However, according to Mr. Allen, a judge did dismiss a case a few years ago, brought by the National Oceanic and Atmospheric Administration (NOAA) against a chemical company there; however, the judge ruled that the chemical injuries to wildlife were not proven. He did not reject the economic methods, but because the economic calculations were based on the wildlife injuries which were rejected, the economic methods were moot. NOAA appealed to a higher court which reversed the lower court and ruled that the injuries were proven; however, this judge forced the parties into settlement negotiations. The case was settled without any ruling on the economic methods.
During preparations however, NOAA assembled a blue-ribbon panel of economists, including two Nobel Laureates (not McFadden), who concluded that Contingent Valuation is a valid technique for purposes of Natural Resource Damage Assessments, so long as a set of standards they detailed were used to prevent bias in the results. (Their conclusions are printed in the 1993 Federal Register, Vol. 58, pgs 4601-4614.) In another federal case, Ohio v. Interior, the court ruled that Contingent Valuation is valid. Economics methods are evolving each year, and anti-bias techniques are included in Conjoint Analysis, which is the reason U.S. Fish and Wildlife Service felt comfortable using this method, according to David Allen.
G-P would not be crippled by a $75 million settlement. It can spread costs over several decades, just like a home mortgage. Funds won’t come from local mills, but from G-P’s worldwide assets. Local jobs are not the issue. As long as mills are profitable, G-P will keep operating them. G-P can’t escape its PCB liabilities; therefore, it has nothing to gain by closing mills, except to lose its source of income. It’s shameful that the paper companies terrorize their workers, in hopes of avoiding their moral and legal responsibilities here.
6. The settlement meets only 20% of G-P's minimum responsibility --- We were told last year by the U.S. Fish and Wildlife Service in its Assessment to expect total compensation of $333 million if the sediment clean up takes more than 40 years to achieve its goals, which it will. According to a DNR study, G-P’s share of responsibility is approximately 22.5% of this total, or $75 million. If justice is to be served and minimum compensation granted, G-P needs to provide the full $75 million.
At the 5 public hearings held in Green Bay, Appleton, Oshkosh, Sturgeon Bay and Escanaba, citizens repeatedly said they felt the $333 million was too low, but the USFWS said they wanted to be sure they had a rock solid number they could easily defend in court without question. It was obvious they considered $333 million as the bare minimum, not as a high starting point to be negotiated downward.
$333 million was a conservative lower-bound estimate, a major compromise from a higher calculated value closer to $600 million, and even that number did NOT include many major types of economic damages such as:
Last year, the DNR claimed the public was getting $55 million in value for G-P’s contribution of only $7 million. According to Prof. Richard Bishop, a respected UW-Madison economist:
This year, the DNR announced at the news conference that the land acquisitions were worth $6 million, which led to numerous news media stories stating the total settlement value at $14.5 million (plus $1.6 million in cost reimbursements). This appeared to double last year’s proposal, giving the impression of significant improvement in the settlement. But the DNR’s estimate last year for the value of 700 acres of the Peshtigo River properties was only $840,000 to $1,050.000. And this year’s settlement added only 363 more acres.
In 2000, the USFWS estimated wetland values in Marinette County (host to the Peshtigo property) of $500 to $1,200, and streamside/riverside prices of $1,500 to $2,500 per acre. Therefore, assuming 90% wetlands (810 acres) and 10% streamside (90 acres), using the lowest and highest figures in each category, the 900 acre Peshtigo property would be worth $540,000 to $1,197,000.
Subtracting the high estimate from $6 million leaves the other 163 acres added this year at a cost of $4,803,000, or $29,466 per acre. The USFWS estimated coastal upland prices in Marinette and Oconto Counties (where the other projects are located) at only $5,000 to $20,000 per acre. These 163 acres are not all uplands. Yet, the range of values for 163 acres using these rates would be only $815,000 to $3,260,000.
Using the highest numbers in these ranges would produce only $4,457,000, and the true number is likely much lower. G-P undoubtedly shopped for bargains, and has owned several of these properties for a few years now. These numbers are not even close to the DNR’s claim of $6 million in land acquisition.
A recent Appleton Post Crescent article quoted Al Toma, a Georgia-Pacific executive, as saying the total G-P settlement (including these land acquisition costs) would cost the company only $12 million, not the $16.1 million reported to the media by the DNR.
When we confronted Greg Hill, DNR’s natural resource damage coordinator, with Al Toma’s statement, he admitted the land acquisition values were a range, and not necessarily $6 million. When we asked why he hadn’t told the news media and public the full range, instead of the high value only, he couldn’t answer.
It’s entirely possible that this settlement’s true total value is far below $12 million, but the DNR (and now the other agencies also) seem unconcerned with accurate accounting, or with fully informing the public. This is poor behavior by the public’s natural resource “trustees.”
8. Settlements in the Dark --- How can citizens evaluate the fairness of a closed-door settlement with Georgia-Pacific, without knowing what the final Compensation and Restoration Plan says? (The total plan for all the mills won't be released until later this summer.) We're opposed to this premature piece-meal approach. The percentage of responsibility allocated to G-P could tell us more about the overall size of the total Restoration Plan, but the agencies have refused to tell us their final calculation of G-P's percentage of the total. Citizens have a 30 day comment period, but they aren't being given key information.
9. Wrong types of projects funded --- A large percentage of the G-P settlement ($3.9 million) is for human park and recreation enhancements, which was heavily criticized a year ago. In recent years, the U.S. Fish and Wildlife Service conducted numerous public opinion surveys (at high cost) and learned that the public placed highest priority on projects designed to improve water quality, fisheries, wetlands and wildlife habitat. Enhancements for human recreation, such as boat ramps, docks, parking lots and trails, received much lower support. Most residents believe we already have many of these human amenities, but the waterways and wildlife deserve much more attention. Clean Water Action Council’s members, as typical members of the public, agree with the survey results and feel that the government agencies are not serving the public interest by focusing so much of the settlement on recreation enhancements. Now, it seems the federal government has abandoned their own research results. Instead, G-P is being allowed to fund high-profile local projects, and public wishes are being ignored. G-P is allowed to make big political points in the community where its mills are located, while the downstream impacted communities get nothing.
10. Northern communities completely neglected --- ALL of the $3.9 million in G-P recreation dollars are targeted for Brown County communities only. NONE are planned for Door, Oconto, Marinette Counties, or Upper Michigan communities which also have PCB fish-eating warnings due to Fox River pollution. If recreation is the goal, then ALL the northern people should have equal access to these recreation dollars. Instead, it appears G-P has been allowed to buy-off local officials with juicy projects, with every Brown County municipality getting a little piece. In addition, all the land purchases for wildlife habitat are on the Bay's westshore, with nothing for the eastshore or Door County, though most of the PCBs are concentrated up the Door County shoreline. Clean Water Action Council’s northern members are not being fairly compensated. The DNR claims that future settlements with the other mills may balance these issues better, but how can the public be sure when we have a comment period now but won't be allowed to see the big picture plans until later?
11. Cat Island Chain Project Risky --- We have opposed the “Cat Island Chain Restoration” because, in reality, it is just another massive dredge disposal site, similar to the Kidney Island (Renard Isle) project we fought for many years in court (and won - twice). One of the legal issues with the Kidney Island project was our belief that water exiting the filter-cells from the island could not meet Wisconsin’s Water Quality Criteria for PCBs. We were prepared with expert witnesses to challenge the Wisconsin Pollutant Discharge Elimination System (WPDES) Permit for this project, but it became moot when we won our case on other grounds. This Cat Island project attempts to bypass this issue by claiming that no WPDES permit is required, and one entire side of the island will be uncontained, with contaminated sediments in direct contact with the Bay’s waters. It will be the equivalent of unconfined open water disposal, which is ordinarily prohibited in Wisconsin. We are very worried about the precedent it will set. But the agencies and scientists are moving merrily forward, before the legal issues have been resolved.
Another problem: G-P in particular should not receive compensation credits for this project, because G-P is the prime user of the Port of Green Bay, for coal shipments. The port has had difficulty finding disposal sites for its dredge spoils for many years, and this project is a very low cost alternative, due to its flimsy structure. G-P is getting NRDA credits for serving its own interests, while threatening the integrity of Wisconsin’s water quality laws and long-term PCB containment. The island is guaranteed to fall apart over time, and therefore, does not constitute a permanent compensation for the public.
12. Remedial Action Plan Misused --- The DNR claims to be following the old Remedial Action Plan which was started in 1986, but that effort was dominated by Brown County people and included no one from the impacted north. And that plan did not designate recreation projects to the exclusion of wildlife habitat. The DNR is misrepresenting and misusing the hard work of a lot of people, including several members of Clean Water Action Council.
13. The Bush Administration has abandoned federal leadership and investment --- This G-P settlement is just a slightly larger version of the DNR's surprise solo $7 million proposal in November 2000. It contains all the same flaws which were roundly criticized by the U.S. Fish and Wildlife Service and other federal agencies at that time, under the Clinton Administration. It's obvious that the federal government is now taking a back seat and allowing the state to decide everything, even though the state fought against negotiating for ANY compensation for several years. We are left with a token effort for one of the biggest PCB sources on the river. The public's interest is NOT being served. (See Comparison of Competing NRDA Compensation Plans)
14. The Cart Before the Horse --- Under the Clinton Administration, we were promised many times that the Restoration Plan and individual settlements like this couldn't be finalized until after the sediment cleanup plan and EPA's Record of Decision are announced (later this summer). This timing sequence was important because the scale of the restoration is supposed to be based on how long it takes for the sediment cleanup to achieve results. If it takes longer, then more compensation is due from the polluters and the dollar amount should increase. Now, under the Bush Admin., we're being told that it's OK for the Restoration Plan to be released before the ROD, keeping the public in the dark on this issue.
15. Stopping the Federal Process --- The U.S. Fish and Wildlife Service (under the Bush Administration) now tells us that they plan no "Report of Assessment," though this is supposed to be the final stage of the Natural Resources Damage Assessment process. This final report would have included a "responsiveness summary" (the trustees' written responses to citizens' hearing and written testimony). Apparently citizens wasted their time submitting written comments and testifying at the hearings. This report would also have included a "preliminary estimate of damages" with more complete totals than previously reported, and a "demand for sum certain" (a final bill to be presented to the responsible polluters.) We were told that as long as the governments were satisfied with the negotiated settlements, the Report of Assessment could be skipped, because the polluters don't want to have to pay for its preparation. The Service says they will write the report only if a polluter sues to oppose their portion of the Restoration Plan. Citizens will be asked to comment on the final proposed Restoration Plan without the benefit of this information, and we may never have a final accounting. Under these circumstances why should we bother to comment to the agencies at all?
16. Taypayer Costs Should Be Fully Reimbursed --- This G-P settlement allocates only $1.6 million to partially reimburse federal and state costs of assessment, and federal costs of the site 56/57 dredged demonstration management. It has been expensive for the government to prepare the multi-document scientific damage assessments and economic damage models. At the end of the 8 year federal process, we were supposed to learn what the total costs were, but that may not happen now. We’ve been told the federal costs were approximately $10 million. We do know that at a similar site in Montrose, California, the U.S. Fish & Wildlife Service assessment research process cost $35 million, which chewed up a huge percentage of the final settlement. Here on the Fox River and Green Bay, we must insist that these costs are separate, and in addition to, the compensation and restoration settlement from the polluters. The state's costs should also be reimbursed completely. (After all, why should taxpayers be stuck with this?) It's obvious that G-P's $1.6 million offer isn't enough.
17. Industry Pressure Politics --- We've heard many instances of the Fox River Group of paper industries sending company lawyers and lobbyists to meet with our local, state and federal agency officials and our elected representatives, keeping up constant lobbying pressure for weakening the cleanup and compensation plans. Ordinary citizens have no way to balance against that pressure, and it's obviously costing us millions of dollars now.
18. Bad Fox River Precedent Being Set --- This is the first of 7 settlements with individual corporations that dumped PCBs in the Fox River. If G-P gets away with paying only 20% of its responsibility, the others will demand equal treatment. This would be a royal rip-off for the public.
19. Could Set Bad National Precedents --- The Fox River case is one of the biggest in the country; therefore, we have a responsibility to set a good example for how NRDAs should be written and enforced to achieve justice. We are being watched closely by other states and citizens who are looking for help. The state’s pro-polluter approach is not a model we want copied anywhere.
20. No Public Hearings --- Over the past 10 years, the DNR has not held a single public hearing to take public comments on the state’s Natural Resources Damage Assessment policy, plans or settlements. When the DNR chose to abandon its NRDA effort in 1992, no hearing was held. When the DNR formed the Fox River Coalition and held meetings for 5 years, no hearing was held, though we repeatedly asked for one. In 1997, when the DNR announced its surprise $10 million contract with the Fox River polluters, which initiated the duplicate state/company NRDA, no public hearing was held (in fact, the contract was a complete shock.) When the DNR formally initiated its NRDA, the state had promised a formal public review process. They told us a comprehensive damage assessment and compensation plan would be presented for public comment, for all 7 of the polluting companies combined. Then, DNR announced the $7 million deal with Fort James, out of the blue, and the DNR again refused to hold a public hearing. At that point, Greg Hill, the DNR’s coordinator of this project, claimed that a wholistic plan would be written only “if necessary.” The DNR made it clear that it intended to continue negotiating secret settlements with the other companies, even though the public hadn’t had a chance to publicly discuss or debate any of the DNR’s proposals or decisions.
The Clean Water Action Council and other groups decided to host their own public hearing, following the $7 million deal. More than 50 people attended this mock hearing, testimony was videotaped, transcribed, and submitted into the formal state record. (The DNR was invited to attend, explain and answer questions, but they refused.) The public was pathetically eager to talk about the issue, but extremely frustrated.
Last summer, Bruce Baker, one of the DNR’s key leaders on this issue, told the audience at the International Association of Great Lakes Researchers that “the DNR is having daily non-stop collaboration” with the paper industry on the Fox River and Bay issues. After the past 10 years of ignoring public concerns and avoiding contact with the public, it is inconceivable that the DNR would have even monthly non-stop collaboration with representatives of the public. Something is desperately wrong with the DNR’s attitude towards the public it is supposed to serve.
In contrast, the U.S. Fish and Wildlife Service held 5 public hearings, in Appleton, Green Bay, Sturgeon Bay, Oshkosh and Escanaba. And prior to this, USFWS held several preparatory programs to present the results of most of the individual damage determinations (on birds, fish, PCB transport, etc.) Their staff were very open and helpful (especially compared to the open hostility often shown by DNR staff.) It’s disturbing that neither the Governor nor DNR Secretary (nor any other lead DNR official) came to the UFWS public hearings to listen to the frustrations of citizens who desperately want to see justice served by an NRDA. The state is not responsive to our concerns.
The state government has worked systematically against the public interest to sabotage the federal NRDA effort, and with the Bush Administration’s cooperation, has succeeded.
This settlement is only a token effort at best. It must be renegotiated to gain public compensation for G-P’s fair share of the conservative $333 million in damages calculated by the U.S. Fish & Wildlife Service, at the very least. Recreation needs to be de-emphasized, and the funds fairly distributed throughout the impacted region.
The public needs more time to evaluate this proposal and send comments to you. In particular, the public should have access to the sediment cleanup Record of Decision for 30 days before the comment period closes on this consent decree. In addition, a public hearing is needed to spur public debate and build awareness of this comment period.
We’ve sent numerous attachments as documentation of our concerns, and to give you a sense of the discussions which have occurred so far on this issue. For more background, please visit our website: www.FoxRiverWatch.com.
CONTENT BY: Rebecca Leighton Katers
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