Recycler at Port Should Clean Up Site, Scientists Say

From boat level in the Los Angeles Harbor, the mountains of shredded metal at the Hugo Neu-Proler Co. rise high enough to obscure the sunrise for several minutes each morning.

It is less the unsightly heaps of former cars, washing machines and iron pipes that concern neighbors and environmentalists, however, than what goes unseen--industrial toxins that have seeped into the soil and washed into the bay during the company’s 33 years in the scrap metal business.

The company was aware of contamination problems for years, critics contend, but has done little to correct them, and only now is planning to take action as it negotiates with the Port of Los Angeles for a new 30-year lease. If the port grants the new lease without first making the company clean up its site--a move that appears likely--it would, some say, be rewarding Hugo Neu-Proler for years of inattention.

“I would say that there are a lot of problems extending a lease to a company that is a known contaminator,” said Jaque Forrest, a scientist with the Santa Monica environmental group Heal the Bay. But, she added, “When it comes to environmental problems, people seem to wait until somebody knocks them on the head” before they correct them. “I think it’s an industrial mind-set.”

Any new lease would require cleanup, but environmentalists say that would give Hugo Neu-Proler little incentive to take care of the problem quickly, if at all.

For their part, Hugo Neu-Proler officials contend they have addressed pollution problems as they have come up over the years--though often only after being cited. They have not performed a comprehensive cleanup of the 26.7-acre site because some of the contamination was there when they arrived in 1962, they said. And both company and port officials said that while Hugo would have to clean up whether it leaves or stays, a lease gives the company an incentive to be a good neighbor and do the maximum, rather than fight over pollution it contends it did not create.

“If you’re moving out of your apartment in two or three months, you’re not going to go through and paint and replace the carpets,” said Don Rice, the port’s director of environmental management. “By renewing their lease, we have an opportunity to bring their facility up to current standards rather than write them off as a lost cause. But we’re not just going to renew their lease and let them proceed as they have in the past.”

The port has a vested interest in seeing the company stick around. Hugo Neu-Proler, which also has operations on the East Coast, is the nation’s largest exporter of scrap metal, and is the port’s 15th-largest money generator, paying $3 million a year in rent, dockage and wharf fees.

Located on the north side of gritty Terminal Island, Hugo Neu-Proler represents the hard-hat end of the increasingly popular business of recycling. The blue-collar company is an environmentalist’s simultaneous dream and nightmare.

Each day, big rigs carry load after 17-ton load of scrap metal into the aging, tainted yard, from structural steel braces to engines to entire cars, much of which would otherwise be tossed into landfills. Grinding up 700 automobiles and 3,000 household appliances a day, the company estimates it has saved 2.5 billion feet of landfill space in 33 years.

At the same time, shredding, storing and shipping the metals has released toxins into the air, water and soil, experts say.

“Recycling is an industry, just like manufacturing is an industry,” Forrest said. “It creates waste. It’s good, but it has its problems.”

Hugo Neu-Proler has acquired a long list of citations over the years, from failing to cover piles of “fluff,” which comes from car seats and dashboards and is classified as toxic only in California, to allegedly sprinkling potentially carcinogenic PCBs into the harbor.

In a study by the State Water Resources Control Board in the late 1980s and early 1990s, samples taken from mussels placed in the water near Hugo Neu-Proler’s loading dock revealed PCB concentrations two to three times higher than at other checkpoint.

Although the manufacture and use of PCBs has been banned since 1979, regulators believed the company was inadvertently sprinkling them into the bay as it loaded older scrap into boats bound for overseas steel manufacturers.

Company officials did not deny responsibility for at least some of the PCB contamination, although they contested the reliability of the state’s testing methods in pinpointing their scrap as the source of the PCBs. Ordered by the state to combat the problem or face a $1,000-a-day fine, the company redesigned its boat-loading system.

Small-boat owners who dock their vessels across the Cerritos Channel have complained that metal dust from the scrap yard coated their boats, and that when loads of scrap were dumped into the holds of cargo ships, the percussive noise was so loud it “sounded like a pile driver,” in the words of former Harbor Commissioner Gertrude Schwab.

“We complained and complained and complained, and their attitude . . . was, well, the fines we get are just the cost of doing business,” said Robert Klingberg of the Los Angeles Harbor Boat Owners Assn., who lives on his boat nearby.

Klingberg agreed with company officials that the scrap yard has made substantial improvements in recent years, although the noise is still bone-rattling sometimes, he said.

Hugo officials say they have spent $2.5 million in the last five years to reduce pollution and become a better neighbor, installing everything from noise reduction devices on the loader to sprinklers to keep down dust, to a system that washes the wheels of outgoing trucks to keep tainted soil from leaving the plant.

Despite such improvements, however, the company has had to undergo an unusually contentious environmental impact report process as it seeks the new lease, with the vote on the report delayed by months as port officials address numerous concerns over the plan.

Initially scheduled to be voted on by the Board of Harbor Commissioners in November, the final EIR is unlikely to be completed until spring, company officials say.

One of the primary concerns has been the plan to clean the soil, which all sides agree is laced with petroleum hydrocarbons and heavy metals.

Although the California Regional Water Quality Control Board, the lead agency on the EIR, approved the company’s soil cleanup plan, the Department of Toxic Substances Control has said the plan may not alleviate the dangers.

Another point of contention has been the cost of cleanup. Before lease negotiations began in 1994, the port required Hugo Neu-Proler to place $10 million in an escrow account to pay for the cleanup. But some industry insiders say the cost could rise to $15 million or more.

“We have guaranteed the port that we are going to clean the property” regardless of the final cost, said company President Jeffrey Neu. The $10-million escrow account, he said, was a “gesture of goodwill” rather than the maximum the company would agree to spend.

Hugo Neu-Proler officials, as well as some neighbors of the business, contend that the campaign against the new lease has been led by Hugo’s primary competitor, Hiuka America Corp., in what has for years been known around the port as the “Scrap Wars.”

Indeed, Hiuka, before three of its top officials were arrested and charged with fraud in December and the company filed for bankruptcy protection, had hired attorneys and environmental consultants to contest the Hugo Neu-Proler EIR. Hiuka officials contend that the report, which calls for allowing Hugo to operate and even expand its operation as it cleans up over several years, is so lax as to give the company an unfair economic advantage.

“We feel that it’s very important that consistent enforcement measures be applied to like industries,” said Les Krohnfeldt, an executive vice president of Hiuka. “If I have had a lease for 25 years . . . when the expiration date comes, I can’t say that it’s unreasonable for you to make me clean it up now.”