A Pittsburgh company and a dam that it owns have become the central political issue in a small South American country in the past week, as charges and rebuttals fly in an unusually public dispute involving an Alcoa subsidiary.
Alcoa’s slow pullout from Suriname — a forest land of fewer than 600,000 people north of Brazil — is coming to a head, as the negotiated divorce between the aluminum maker’s subsidiary and the country’s government moves toward a parliamentary vote.
A parliamentary committee is beginning its review of the proposed 285-page pact, under which the company would give its dam to the country at year’s end; rules for environmental remediation would be outlined; and Alcoa’s potential involvement in future mining there is contemplated.
On July 13, the main opposition party — the VHP, whose initials reflect the Dutch words for Progressive Reform Party — blasted the proposal in a press release. Alcoa’s subsidiary Suralco then took out full-page ads in the country’s newspapers defending the proposal and accusing the VHP of distortions. And now, with elections nine months away and the opposition leading in the polls, the proposal is a political hot ingot.
“Right now what we are seeing is that a lot of issues are brought up in this new proposal," said Wendell Asadang, a member of the ruling National Democratic Party who leads the parliamentary committee studying the proposal. He’s contemplating parliamentary demands for changes to the proposal negotiated between Alcoa and a presidential commission over several years. “We need to sit together with each other and look at the points on which we have some issues and find some solutions."
An Alcoa spokesman wrote in an email response that he was not available for an interview.
The Pittsburgh Post-Gazette with the support of the Pulitzer Center explored the company's pullout in The Land Alcoa Dammed.
Alcoa and Suralco started mining bauxite — aluminum’s ore — in Suriname in 1916. In 1958 the aluminum company joined with the Dutch colonial government in the Brokopondo Agreement, allowing the construction of the Afobaka Dam. That 10-million-cubic-yard barrier flooded a jungle territory, nearly the size of Allegheny County, that had been inhabited by descendants of escaped slaves. It also powered a refinery and smelter that transformed the country’s economy from rural to industrial.
A decades-long slowdown culminated in the 2015 end of Alcoa’s production in the country. Since then, the company and the country have been in talks, mostly focused on the dam, which provides much of the nation’s electricity.
The proposed pact hammered out by the company and the presidential negotiating team now sits with the 51-member parliament, in which the NDP has 26 seats, and the VHP has the next-largest bloc.
The VHP claims that under the Brokopondo Agreement, the dam should have been given to the government in 2015. Instead the country has been paying Alcoa’s subsidiary for power. “There is a government and a powerful Alcoa, and they have been able to make other agreements while the nation has been at a disadvantage," said Asiskumar Gajadien, a VHP member of parliament.
A key critique: The proposed pact doesn’t guarantee that the dam is turned over in “good condition,” nor that Alcoa would take on any unanticipated repairs after the handoff.
“We are seeing that it is proposed to be turned over on an as-is basis,” said Mr. Asadang.
Suralco, in its newspaper ad, asserted that the dam “at this moment is in good condition” and would be handed over in a "functioning state." The company wrote that it had no obligation to guarantee the condition of the hydropower station.
“I think it’s for all parties necessary that there is a good second or third opinion” on the dam’s condition, said Mr. Gajadien.
The company's hundred years of industrial activity left vast gashes in the forest, small lakes of refinery waste, and a zone around the refinery site in which there are concerns about soil and water contamination. The head of the president's negotiating team, businessman Rudi Dilip Sardjoe, has told the Post-Gazette that Alcoa's clean-up costs are expected to be $300 million to $400 million.
In its ad, Suralco wrote that the environmental cleanup will be overseen by the Surinamese government, but since that country has no real environmental remediation rules, it will comply with U.S. standards.
Mr. Asadang said he's asking whether international standards would be stronger than U.S. rules. Mr. Gajadien complained that the proposal doesn't include "enough security that [clean-up] will be done in the way we want."
The pact should also be more specific regarding what will be rehabilitated and how, said Mahinderkoemar Jogi, a member of parliament with the VHP. He said the government should also negotiate with Alcoa for compensation for the areas flooded out when the dam was built.
Critics of the proposed pact have said in the Surinamese press that it gives Alcoa too much influence over mining opportunities in the country’s western region, called the Bakhuis. Suralco in its ad countered that it has agreed to investigate the opportunities there, but with no conditions that it would eventually mine there.
Committee meetings on the proposed agreement could start any day. Parliamentary Chairwoman Jennifer Simons couldn’t say when a final vote might occur.
Mr. Jogi said he’s concerned that the vote could be delayed until late in the year, when pressure will mount since the pact contemplates a year-end handover of the dam to the government. Then the government of President Desi Bouterse, and his NDP’s majority in parliament, could contend that rejection would jeopardize the long-sought receipt of the dam.
While a united NDP could approve the deal, the VHP is making the argument that Alcoa should pay attention to its concerns — rather than counter them in ads.
The ad was "very unusual," said Mr. Gajadien, who wonders why the company, rather than the country's presidential administration, took on the role of responding to the VHP critique. “The question is why Alcoa or Suralco interferes in some political processes,” he said, adding that the Bouterse government is “corrupt.”
He said he hopes Alcoa keeps in mind its corporate responsibility to Suriname, citing polling favoring the opposition. “Next year there is an election, and all what we see until now from the polls, we should be the next government."