Yet Another Reason to Think About Who You Do Business With

In Natural Resource Economics class, we were asked to go to the EPA's case files and report on one. I could not believe some of the cases my classmates and I found. They ranged from illegal leopard hunting and smuggling to wetland filling and sewage leakage in low-income housing in Mississippi. In 1989, the governor of Maryland launched a "Chesapeake Born" campaign to increase public salience about the health of the dirty Bay after water quality surveys turned up more than dirty syringes from Jersey.

Part of that campaign was for school children of every grade to write an essay about the plight of the state fish, the striped bass. I won the county contest, and my essay went on to the governor for his compilation. This contest, and earlier trips with my dad to places like Blackwater Refuge and Assateague Island, made me interested in Ecology. Here's the case I found that hit close to home:

Atlantic States Cast Iron Pipe Co.

In 2006, the Atlantic States Cast Iron Pipe Company of Phillipsburg, NJ, was convicted of 32 of 34 counts of violating the Clean Air (1 count) and Water (22 counts) Acts, exposing employees to dangerous conditions (4 counts), and impeding and obstructing Federal regulatory and criminal investigations (9 counts). The facility is owned by McWane Industries which is one of the world's largest makers of cast-iron water and sewer pipes, and was the 4th sentencing of a McWane facility since 2005. The trial was 7 months long, and was the longest in environmental crimes history.

Four managers of the facility were also convicted of environmental and work safety crimes. According to federal prosecutors, the company violated the Clean Water Act by discharging petroleum contaminated water and paint into storm drains which lead to the Delaware River, a tributary of the Chesapeake. They violated the Clean Air Act by burning tires and excessive amounts of hazardous waste paint in their furnace. They maintained a dangerous workplace by altering accident scenes and concealing serious worker injuries from health and safety inspectors which resulted in the death of one employee and multiple severe injuries. The company impeded and obstructed federal and state investigations by routinely lying to OSHA and environmental investigators.

In April of 2009, the company was sentenced to pay an 8 million dollar penalty and 48 months of probation that requires biannual reports to the court, for what the EPA called an eight year conspiracy to pollute the air and the Delaware River. John Prisque, the plant manager, was sentenced to 70 months of federal prison. Jeffrey Maury, the maintenance Superintendent was sentenced to 30 months, Scott Faubert, the Human Resources manager, 41 months, and Craig Davidston, the finishing department manager, 6 months.

Even though the Chesapeake is polluted by many point and non-point sources along its tributaries in 6 states, this facility was in obvious violation of many crimes spanning beyond environmental crimes. Many people suffer from the pollution ranging from those whose immediate groundwater is effected, to the people who fish, crab and harvest shellfish from the Bay. Shellfish harvesting has been closed for decades, placing more pressure on beds in smaller bays off the barrier islands of Delmarva. Scientists have been telling locals to stop eating trout, flounder and halibut caught in the bay and its rivers since 1989, and in a recent study released in January, the blue crab population has crashed, leaving regulators rushing to implement restrictions before the crabbing season begins this summer.

The EPA did not say how long the facility had been polluting, but the investigations occured over an eight year span. Being the fourth conviction of its parent company, the marginal costs of the corporation obviously omitted the external costs of its pollution for years. Excluding the human factor of their OSHA and L&I violations, the company profitted off of not paying for the proper environmental disposal of its waste, and these actions should make its investors and customers question the ethics of these profits.

While I feel the criminal sentences of the managers is fair, because human lives were in danger, the company's penalties seem light, especially since it was McWane's fourth conviction. The probation period does not seem long enough when the EPA is stressing the priority of cleaning up the Chesapeake's tributaries. Sometimes, as in the recent corruption in the banking system, companies deserve to go out of business. Leaving the market is just as much of free enterprise as entering and supplying the market, and this does not seem like a corporation that deserves to serve our market. Perhaps with a larger financial penalty for McWane, a smaller company could grow and serve the market more responsibly.