Asarco sale raises suspicions: The government sees a plot to skip out on site cleanups; the company says it is restructuring to remain in business.

Asarco sale raises suspicions: The government sees a plot to skip out on site cleanups; the company says it is restructuring to remain in business.

ASARCO sale of assets

This article details a dispute over ASARCO’s attempt to sell its 54% stake in the Southern Peru Copper Corporation, which was ASARCO’s most valuable asset at the time. ASARCO was attempting to sell this stake to another subsidiary of ASARCO’s parent company, Groupo Mexico. This attempted sale raised concerns amongst members of government agencies such as the Department of Justice and the Environmental Protection Agency, as there was concern that ASARCO was not selling the shares for market value. Selling these shares would have brought ASARCO every closer to bankruptcy, as the profits from the copper mining were a large and reliable revenue stream for the company. Many suspected that this sale was intended to push ASARCO further towards bankruptcy as an attempt by the company to escape their debts and liabilities to clean up sites they contaminated all over the country. On the other hand, ASARCO claimed that the sale was simply an attempt by the company to restructure the company and to pay off a lone that would come due shortly after the proposed sale. The federal government decided to block the sale in order to prevent ASARCO from potentially using to attempt to escape their liabilities. The action taken by the government was very significant for Omaha, as allowing the company to go bankrupt could have acted as a barrier to the proper remediation of the Omaha Lead Site. The article estimates that ASARCO would be responsible for 2/3-3/4 of the costs of remediating the site, which the article estimates at $134 million. Further still, this action was significant in preventing the costs remediating the site from being passed on to tax payers, helping to prevent tax payer subsidization of environmental injustice. This article exemplifies tactics that ASARCO could use in an attempt to evade their liability under CERCLA, and also demonstrates a forceful response by the government to prevent the use of these tactics. When taken in conjunction with the eventual settlement reached between ASARCO and the federal government, this article provides some evidence to say that the EPA put at least some amount of concerted effort into forcing ASARCO, the party most responsible for the contamination at the Omaha Lead Site, to pay for the remediation of the environmental hazard they created. Overall, this can be seen as an attempt by the federal government to enforce the need for environmental justice in in the Omaha Lead Site, although the extent to which this was accomplish may not be to the standard state in CERCLA.

Nancy Gaarder

The Omaha World-Herald

August 26, 2002

English

Newspaper Article

Asarco sale raises suspicions: The government sees a plot to skip out on site cleanups; the company says it is restructuring to remain in business.

Newspaper Article