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Chile Halting Operations at Copec Pulp Plant

Story by Fiona Ortiz - CHILE: January 19, 2005

SANTIAGO - Chile's environmental agency on Tuesday ordered Copec, one of the world's biggest forestry companies, to shut a large wood pulp plant until the company resolves several environmental problems at the facility, which activists have linked to deaths of wild swans.

Environmentalists applauded the action. Copec's shares fell after the government order, which the company said was unfair because it has strived to meet environmental standards.

The Conama agency said in a statement it was also initiating a proceeding to sanction Copec unit Celulosa Arauco y Constitucion for problems at the Valdivia plant, one of its five plants, 460 miles (740 km) south of Santiago.

"The measure is totally out of proportion and unjustified," Arauco said in a statement on Tuesday evening. The statement did not say whether the plant had suspended operations.

The plant stoppage was an extreme measure that would raise costs, hurt jobs, and damage the international reputation of the company, the statement said.

Conama said that in a Jan. 13 inspection, the agency found the plant was exceeding the amount of wood pulp it is licensed to produce, using unauthorized water sources and violating water temperature parameters.

Arauco, Copec's forestry unit, started up its $1.2 billion Valdivia plant a year ago. The plant, which produces more than 600,000 tonnes of wood pulp a year, has been blamed by environmental groups for the deaths of black-necked swans in a protected wetlands nearby.

Copec shares closed down 3.22 percent at 4,210.00 pesos, the company's lowest share price in almost a year.

The company said in a statement there is no proven link between the swans' deaths and emissions from the plant. Conama is funding a study on why a waterweed had died off in the sanctuary, starving the swans.

Forestry is one of Chile's top industries.


A week ago Conama also ordered a halt to construction at a new pulp plant that Arauco is building, the $1.4 billion Itata project, due to environmental infractions at the site.

Conama ordered Arauco's Valdivia plant to improve environmental monitoring and prove it is not exceeding volume limits. Conama said it also asked for an environmental impact study on an existing emergency waste duct.

Arauco's statement said the plant has never exceeded production limits. It said the orders took it by surprise since it recently submitted to an environmental audit, and agreed to resolve problems detected at the time.

Environmentalist Manuel Baquedano said the plant had been forced to admit it had an unauthorized, clandestine waste pipeline that was illegally dumping waste into a river.

"Undoubtedly the government has reacted to extensive citizens' outcry," Baquedano, president of the Ecological Policy Institute, told Reuters. "The wood-pulp issue has become key in Chile, because it is an industry that has not resolved its industrial problems."

Conama fined the Valdivia plant twice last year, for a total of almost $40,000, for bad odors and not properly reporting its monitoring of organic chemicals.


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© Reuters News Service 2003

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