Wood Products Producer Agrees to Major Cleanup

In the biggest environmental settlement of its kind, one of the nation’s largest wood and paper producers has agreed to spend up to $90 million to resolve allegations that its factories illegally pumped thousands of tons of smog-producing chemicals and other pollutants into the air, federal officials said Thursday.

The settlement includes $11.2 million in penalties against Portland, Ore.-based Willamette Industries--the largest fine ever assessed against a source of factory pollutants, said Atty. Gen. Janet Reno and Environmental Protection Agency Administrator Carol M. Browner in announcing the pact.

The agreement also requires the wood-industry giant to install tens of millions of dollars worth of new pollution-control devices at 13 factories.

Those steps, Browner said, should remove about 27,000 tons of pollutants from the air in the next five years, the equivalent of taking 287,000 cars off the road. “When a company chooses to pollute the air, it is not just breaking the law, it is placing the health of our families at risk,” she said.

Federal authorities alleged that Willamette was violating the Clean Air Act by producing plywood, particle board and other wood products at factories in Oregon, Arkansas, Louisiana and South Carolina without installing needed pollution controls or getting required permits.

Willamette, which operates 107 plants across the country with revenue of about $4 billion in 1999, also has eight paper-producing plants in California.

None of those facilities was cited in Thursday’s record settlement. But the company has had a few run-ins with the South Coast Air Quality Management District in the last five years over its Southern California operation. Last year the company paid an $8,000 penalty for failing to get a permit at its Cerritos plant, an AQMD official said.

Willamette officials said they decided to settle the EPA case rather than expend time and money to fight it.

Company officials admitted that in at least two instances in plants in Louisiana and Oregon, Willamette had violated permitting and environmental operations procedures. But, company officials maintain, in the bulk of the allegations leveled by the government, the company was the victim of changing standards imposed by the EPA.

“We were not entirely innocent, but our errors were errors of omission, not realizing what we needed to do,” said Willamette spokeswoman Cathy Dunn. “Certainly if we knew 20 years ago what we know today about how the EPA was going to interpret the rules, we would have done things differently.”

The company now will have to begin doing things differently, installing state-of-the-art equipment at its plants to minimize pollutants and submitting to environmental audits to ensure compliance.

But estimates from federal authorities and Willamette on how much it will cost the company to install the new equipment differed wildly Thursday.

EPA officials, citing figures that they submitted to the company during negotiations, said they expect Willamette to spend about $74 million on the anti-pollution technology. That, along with the penalty and the $8 million that the company is required to spend on additional environmental projects, would bring the total value of the settlement to about $93 million.

But Willamette officials said they expect to spend only $28 million to install the new technology. Dunn said she was “clueless” about how the government got its $74-million figure.

Both sides agree, however, on the $11.2-million penalty, and environmental activists hailed the record sum as an encouraging step against polluters.

“The combination of having to put in a state-of-the-art control system and pay a significant penalty has all the earmarkings of a substantial settlement,” said David G. Hawkins, air and energy program director of the Natural Resources Defense Council.

“I think the [wood-producing] industry should realize--this and other manufacturing industries--that the government is serious about enforcing the Clean Air Act requirements for permitting new and modified sources of pollution,” he said.

This is the third settlement since 1993 that the government has reached with a major wood industry manufacturer. Browner said the deal reflects the success of the EPA’s recent efforts to identify industries with frequent air quality problems--such as wood production, diesel engine manufacturers and coal-fired power plants--and bring action against the industries’ major players.