A Pittsburgh Post-Gazette Editorial
Alcoa has the opportunity to set a global example of corporate leadership in Suriname, a tiny country it is leaving after a century of industrial activity there that helped the nation in some ways and hurt in others. The company should do everything it can to leave the country on good terms, with as many assets as possible. The world will be watching. Alcoa's actions will reflect on Pittsburgh, soon to become the company's global headquarters once again, though it is smaller after shifting its processing operations last year to a new entity, Arconic.
Alcoa's ties to Suriname, from Alcoa's earliest bauxite mining there about 100 years ago to current negotiations over the company's departure, were the subject of a three-day series in the Post-Gazette last week by reporters Rich Lord and Len Boselovic and photographer Stephanie Strasburg. Their series, "The Land Alcoa Dammed," painted a portrait of a country fashioned to Alcoa's liking — strip-mined, dammed and flooded to support the recovery of bauxite and the refining and smelting required to turn it into aluminum.
The company's investments brought electricity, education, new housing, health care and employment opportunities to Suriname, a former Dutch colony that gained full independence in 1975. Alcoa's efforts layered an industrial economy and middle class onto a clan-based agricultural society, but these changes occurred unevenly and at great cost. To build the hydroelectric dam needed to run its refinery and smelter, Alcoa struck a deal with Suriname's government to flood an area 85 percent as large as Allegheny County, displacing about 6,000 people from jungle villages. The government gave those displaced only a pittance in compensation, and Alcoa did comparatively little to improve their lot.
After closing the smelter in 1999, Alcoa focused more of its attention on selling surplus electricity to the government. That occurred at the government's request. In dispute now is when Alcoa should turn over the dam. Under a nonbinding agreement it has with the government, Alcoa may own the impoundment and continue selling electricity through 2019. But some legislators in Suriname say the company, which ceased all industrial operations there in 2015, should cede ownership now.
Alcoa's shutdown in Suriname — resulting from a depressed aluminum market, depletion of easily accessible bauxite reserves and other factors — has contributed to the country's broader economic problems. The impact, Mr. Lord and Mr. Boselovic noted, is not unlike the collapse of Pittsburgh's steel industry in the 1980s, except that Suriname, retaining some of its 19th-century characteristics, is less equipped to meet the challenges.
There also is the question of how well Alcoa will clean up industrial sites — a worry emanating partly from lax environmental regulation. Alcoa, beset by financial problems for years, may be tempted to cut corners on reclamation efforts. However, its top representative in Suriname, Ruben Halfhuid, vowed to follow "the best practices in the world." Alcoa's shareholders and directors must hold the company to that commitment — and require it to cede the dam as soon as possible.
The Post-Gazette's series is a cautionary tale about economic exploitation, with lessons applicable to any place and company brought together by resources and opportunity. In the way it exits Suriname, Alcoa will have its final opportunity to shape the country. It should go the extra mile, as Pittsburghers are wont to do.