National Symposium on the Aluminum Smelters
Posted: Monday, December 11, 2006
by Christopher E. M. Castagne
December 11, 2006
The symposium on the aluminum industry in Trinidad and Tobago which took place this past Wednesday was the most positive development in the entire smelter issue so far. For the first time in this two year old debate, the nation was presented with credible, relevant and current information on all of the major aspects of the proposed smelters. This included information and research on the economic, social, engineering, legal, and environmental concerns and implications, as well as on the Global Aluminum Industry, presented by local and international experts with decades of experience.
Sadly, the huge significance of what transpired was totally missed by the press, and, to a lesser extent, the general public. The press seriously disappointed by only attempting to perpetuate the much abused and clichéd assumption that Trinidadians like bacchanal in looking for some sort of action story, and totally sidelined the actual content of the proceedings in their coverage of the event. That aside, if the conspiracy theorists could let go for a split second the fact the symposium was mandated by the Prime Minister and given to the NEC, an acknowledged serious conflict of interest, but realize that in the end neither party had any controlling interest or significant input into the proceedings, they might just be able to recognize some of the resounding victories scored by the people of this nation in the process.
In fact, perhaps the most significant implication of the entire venture lies in the final outcome, that was so far from what was originally anticipated (or dreaded, rather), and in the fact that in hosting such, the organizers, principally the South Chamber of Industry and Commerce, were so resoundingly successful at meeting the highest demands of the concerned public in terms of presenters and content of presentations, composition of invited audience, live coverage for the public (two TV stations, broadcasting on three channels, two local and one cable, as well as radio) and even public opportunity for live participation, via the Internet. While it deserves commendation, their success is not the significant part; that it was solely due to the overwhelming public pressure that these conditions were successfully met is! If one were to look closely, one would realize that this has largely been the story with each stage of this struggle so far. Further, to extrapolate that experience into the future, we would be all well-advised not to pay any heed whatsoever to whatever cries, claims or lamentations of "done deals" we hear floating around, and to understand, with conviction, that the truth shall always prevail in the end; and that with perseverance, comes success!
To expand on some of what was mentioned above, the following is a short report on some of the salient outcomes from the symposium.
Energy Minister Lenny Saith’s short contribution was simply to outline Government's justification for the proposed smelters, the main benefits identified as monetizing natural gas, technology transfer, economic diversification (including possible downstream industries), sustainable jobs and wealth creation. About the concerns raised, he simply said that an (unspecified) proportion of Alcoa’s produce would be sold for local use, that relocation would be carried out with respect and dignity and that the smelters will be subject to the "rigorous regulatory process" to ensure they comply with the Town & Country and EMA legislation. Absolutely no scientific or empirical evidence, no facts or figures, were used to support his claims, each of which was later picked to pieces and shown to be at best unlikely, at worst totally false! And this was done by unemotional, objective intellectual experts and authorities who clearly outlined their points and provided undisputable supporting research.
First, Colin Pratt, an international expert in the aluminum business, gave an insightful overview of the global aluminum industry. He showed aluminum to be a high demand product with a huge, expanding and secure market, and showed Trinidad as an ideal location for smelting due to relatively clean energy at a competitive price and favourable positioning to raw material (e.g. from Jamaica) and market (Europe and North America). He also mentioned that out of the original big six companies who controlled the business worldwide, Alcoa was one of the only two remaining and the only one with the original guarded, vertically integrated structure. He also mentioned that due to recent increases in transparency in power regulations and energy prices aluminum companies were finding it difficult to set up smelters in first world countries! Additionally, he said he found the argument about downstream industries curious as these are usually situated much closer to the market, i.e., in Europe or America, and would not work easily in Trinidad.
All of these points were of much interest during the economic presentation by Mr. Gregory McGuire, a leading economist, former Chairman of NGC and current UWI lecturer. McGuire confirmed that the current industry price for natural gas in Trinidad and Tobago is too expensive to attract smelters. Based on estimations for the price of natural gas that would be required for the Alcoa smelter to be economically feasible, he showed that the country would be generating significant losses from the enterprise, especially with Alcoa maintaining 100% interest as is the case. In terms of economic diversification, McGuire mentioned that the smelters would only achieve diversification within the energy-based industry and use of natural gas, but that Trinidad currently already has one of the most diversified gas portfolios in the world, thus nothing new would be accomplished. Entry into the global aluminum market via production of aluminum and downstream products he saw as having positive economic potential for the country under certain conditions, which the listener was able to realize are basically not being met by the Alcoa smelter. In terms of downstream spinoff industries, the case of local steel production was recalled as having been similarly justified, with the anticipated downstream activities never materializing! More than one presenter would subsequently agree that these can still take place in Trinidad, without the presence of any smelters, based on imported aluminum as in Japan, where such activity is thriving.
Dr. Roy McCree presented just before McGuire. McCree is an accomplished social scientist and lecturer, born and bred in Pt. Fortin, who has done extensive research on the impact of industrialization on the socio-economics and quality of life of Point Fortin, La Brea and the entire southwestern peninsula. He began by highlighting the diversity in size, demographics, history and lifestyles of the various communities in the peninsula and environs, exposing the common notion of a single homogeneous mass as far from reality and illustrating the doomed nature of any "one size fits all" approach to developing the area. He proceeded to put the issue into important historical and current context, with the La Brea and Pt. Fortin experiences of the oil industry up to the mid to late 20th century and Atlantic LNG at present, respectively. Using hard facts, he showed how general increase in economic activity to the area associated with industrialization usually results in only minimal socio-economic benefits to the pre-existing residents, as the more sustainable and higher paying jobs always go to persons from outside the area. He also reminded the audience that the positive social contributions to the La Brea area in the days of the oil refinery only came about as a result of the fierce rioting in the 1930s, and were not due to "philanthropic" philosophies of the oil companies!
Other speakers (Prof. John Spence) showed how intended objectives of sustainable jobs and economic activity and improvement of socio-economic situation and quality of life could be achieved without the presence of any smelter per se, i.e., alternative development, including agriculture and downstream aluminum industry based on imported aluminum which could be smelted in Guyana using renewable energy, vast uninhabited land space, and promoting Caribbean integration.
Prof. Julien Kenny reinforced this possibility and suggested such activity would be far more along the lines of the Caribbean Aluminum Industry as envisioned by Dr. Eric Williams. He also outlined government’s breach of local legislation and international treaties and agreements, and highlighted the lack of legislative infrastructure to manage and control these industries and recent examples of very serious consequences of this lack of environmental management on a small scale. Health effects were shown to be minimal when the industry is subject to proper precautionary practice, for which legislation and enforcement power are most necessary. (Recent experiences of our Caribbean neighbours in Jamaica highlight our vulnerability to the unscrupulous activities of these multinationals, specifically Alcoa (See T&T Review- Monday Dec. 4th article by John Maxwell p. 10).
Note: After 12 years in court and exhausting all appeals, when Alcoa was finally commanded to pay money to one villager for damages caused to his roof and house, the company made it clear that it was not going to accept that as any reason to repay the remaining 59 households who also sustained damage, leaving them the possibility of having to pursue the cases in court one by one! (See www.jamaica-gleaner.com/gleaner/20010417/lead/lead1.html)
NOTE: All papers available at www.stcic.org/symposium/index.htm
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