08/01/2002 - 21:00

Alcoa sets the record straight

08/01/2002 - 21:00

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AT the weekend the WA operations of multi-national aluminium giant Alcoa resorted to paying for a full-page advertisement in local daily The West Australian to highlight its claims have been ignored in a debate raging

Alcoa sets the record straight
AT the weekend the WA operations of multi-national aluminium giant Alcoa resorted to paying for a full-page advertisement in local daily The West Australian to highlight its claims have been ignored in a debate raging about emissions from its refineries.

Using WA Health Department statistics, Alcoa was attempting to set the record straight on concerns that people living near its South West WA operations were at a higher than usual risk of cancer.

The cancer concerns were raised in a front-page article in The West, but the company felt compelled to advertise the statistics, which took a few weeks to pull together, in response to the story.

So, with more than a little irony, it spent $16,000 telling readers that the only evidence available shows residents of places like Yarloop near the Wagerup refinery are no

more at risk of developing cancer than anyone else in the region.

The last time the company used such an advertisement was to highlight an environ-mental award it won from the United Nations about a decade ago, the only mining company to have achieved this particular level of acclaim.

Alcoa has long been admired by Western Australians for its environmental record, a clean reputation that has allowed it to comfortably operate one of the lowest-cost alumina smelting operations in the world – right next door to a contented community.

It is also highly regarded for its work practices, safety record, employee relations and community consultation.

In fact, Alcoa Australia ranked sixth in the 2001 Good Reputation Index, in which sister publications the Sydney Morning Herald and the Age rated the reputations of Australia’s top 100 companies.

That a company with such a reputation, built during the past four decades of operations, can suddenly find itself painted as the bad guy is almost unthinkable and has huge ramifications for a state that relies heavily on such projects.

The drama has already resulted in the suspension of any efforts for a $1 billion third-phase expansion of Wagerup, which would add around $400 million a year in exports, more than the entire lobster industry.

While alumina prices in the doldrums might not seem such a problem, Alcoa’s capital might find another home outside WA if the commodities fortunes change as expected.

So what went wrong?

It seems a relatively minor issue, which started with the installation of new liquor burners at Wagerup in early 1996, was not recognised for its devastating potential. Complaints about odours and what appeared at the time to be generally small health issues were played down by the company because testing showed toxic emission levels were well below accepted tolerance levels.

But this did not make the problem go away. Not only did community concerns flare again, but the delayed response has left the company with a host of new and more difficult problems – such as the sudden spate of cancer concerns, compensation claims from former employees and an imploding local community which is strongly divided, particularly in tiny Yarloop where the generosity of compensation packages may depend on which street you live in.

Alcoa Australia corporate relations manager Brian Wills-Johnson said much of the recent furore could have been avoided if the company had dealt with the issue earlier.

“In hindsight, it took us too long to turn from the position that we weren’t doing wrong to realising it was a real concern in the community and that we needed to do something about it,” Mr Wills-Johnson said.

But he is also adamant that much of the recent hue and cry is based on fallacy, with publicity failing to match the facts, cancer talk being one of them. (Another rumour is that Alcoa owns Iluka, which it doesn’t.)

The company believes science will solve the problems it now recognises as legitimate (such as the liquor burning emissions), but is concerned that the community has become so sensitive it will be difficult to win them over with purely scientific arguments.

Now Alcoa, having largely created an atmosphere where distrust prevails, has to bear the brunt of accusations against it which it finds difficult to disprove quickly.

The company has won support from academic circles, with UWA microbiologist professor Barry Marshall and Murdoch engineering professor Peter Lee voicing their concerns regarding the recent debate.

Professor Lee, WA president of the Institution of Engineers, said it was time to look at the data, rather than allowing emotion to rule the debate.

He said he would support the closure of any operation where a causal link to cancer could be shown, but in the meantime rational debate was needed to ensure the economic strengths of the state were not undermined.

“WA’s economy is interlinked with these industries,” Prof Lee said.

“Whether we continue to operate them will depend on community attitudes, that is where we are concerned with irrational debate.”

He added that WA was continuing to make mistakes which would jeopardise industry, with the placement of the Kwinana Motorsport complex too close to the neighbouring industrial area as a prime example of failing to keep community and industry adequately divided.

“We have to get our planning rules right.”

AT the weekend the WA operations of multi-national aluminium giant Alcoa resorted to paying for a full-page advertisement in local daily The West Australian to highlight its claims have been ignored in a debate raging about emissions from its refineries.

Using WA Health Department statistics, Alcoa was attempting to set the record straight on concerns that people living near its South West WA operations were at a higher than usual risk of cancer.

The cancer concerns were raised in a front-page article in The West, but the company felt compelled to advertise the statistics, which took a few weeks to pull together, in response to the story.

So, with more than a little irony, it spent $16,000 telling readers that the only evidence available shows residents of places like Yarloop near the Wagerup refinery are no

more at risk of developing cancer than anyone else in the region.

The last time the company used such an advertisement was to highlight an environ-mental award it won from the United Nations about a decade ago, the only mining company to have achieved this particular level of acclaim.

Alcoa has long been admired by Western Australians for its environmental record, a clean reputation that has allowed it to comfortably operate one of the lowest-cost alumina smelting operations in the world – right next door to a contented community.

It is also highly regarded for its work practices, safety record, employee relations and community consultation.

In fact, Alcoa Australia ranked sixth in the 2001 Good Reputation Index, in which sister publications the Sydney Morning Herald and the Age rated the reputations of Australia’s top 100 companies.

That a company with such a reputation, built during the past four decades of operations, can suddenly find itself painted as the bad guy is almost unthinkable and has huge ramifications for a state that relies heavily on such projects.

The drama has already resulted in the suspension of any efforts for a $1 billion third-phase expansion of Wagerup, which would add around $400 million a year in exports, more than the entire lobster industry.

While alumina prices in the doldrums might not seem such a problem, Alcoa’s capital might find another home outside WA if the commodities fortunes change as expected.

So what went wrong?

It seems a relatively minor issue, which started with the installation of new liquor burners at Wagerup in early 1996, was not recognised for its devastating potential. Complaints about odours and what appeared at the time to be generally small health issues were played down by the company because testing showed toxic emission levels were well below accepted tolerance levels.

But this did not make the problem go away. Not only did community concerns flare again, but the delayed response has left the company with a host of new and more difficult problems – such as the sudden spate of cancer concerns, compensation claims from former employees and an imploding local community which is strongly divided, particularly in tiny Yarloop where the generosity of compensation packages may depend on which street you live in.

Alcoa Australia corporate relations manager Brian Wills-Johnson said much of the recent furore could have been avoided if the company had dealt with the issue earlier.

“In hindsight, it took us too long to turn from the position that we weren’t doing wrong to realising it was a real concern in the community and that we needed to do something about it,” Mr Wills-Johnson said.

But he is also adamant that much of the recent hue and cry is based on fallacy, with publicity failing to match the facts, cancer talk being one of them. (Another rumour is that Alcoa owns Iluka, which it doesn’t.)

The company believes science will solve the problems it now recognises as legitimate (such as the liquor burning emissions), but is concerned that the community has become so sensitive it will be difficult to win them over with purely scientific arguments.

Now Alcoa, having largely created an atmosphere where distrust prevails, has to bear the brunt of accusations against it which it finds difficult to disprove quickly.

The company has won support from academic circles, with UWA microbiologist professor Barry Marshall and Murdoch engineering professor Peter Lee voicing their concerns regarding the recent debate.

Professor Lee, WA president of the Institution of Engineers, said it was time to look at the data, rather than allowing emotion to rule the debate.

He said he would support the closure of any operation where a causal link to cancer could be shown, but in the meantime rational debate was needed to ensure the economic strengths of the state were not undermined.

“WA’s economy is interlinked with these industries,” Prof Lee said.

“Whether we continue to operate them will depend on community attitudes, that is where we are concerned with irrational debate.”

He added that WA was continuing to make mistakes which would jeopardise industry, with the placement of the Kwinana Motorsport complex too close to the neighbouring industrial area as a prime example of failing to keep community and industry adequately divided.

“We have to get our planning rules right.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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