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(DV) Siddons: Can There Ever Be Fair Trade Copper?





Can There Ever Be Fair Trade Copper?
by Alistair Siddons
March 29, 2007

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Fair trade copper might seem an unfamiliar concept, so I'll start at the beginning. There was once a Midwestern copper smelter called Chemetco.

In 2001, it declared itself bankrupt after being fined nearly four million dollars on conviction of sustained and calculated criminal environmental offences.

For ten years, the Chemetco Corporation discharged hazardous waste into a tributary of the Mississippi. And when caught in the act, the company tried desperately to lie its way out of trouble.

Chemetco treated with contempt the hazardous waste regulations that came into existence almost 30 years ago. Its behaviour was monitored and logged for decades and yet its grossest violation was only discovered by accident.

The Chemetco story proves that even the hefty enforcement powers of US agencies can only imperfectly police the environmental conduct of heavy industry. So perhaps we should be rather more concerned about lead and copper smelters in developing economies where environmental regulation is undeveloped.

When we buy goods containing copper, have we really paid for the so-called 'negative externalities' associated with the copper? The Chemetco story shows how one major producer didn't even care.  Effectively, even US citizens weren't buying fair-trade copper when they bought Chemetco copper, as many did.

Global demand for copper increased at a compounded annual growth rate of 3.3% per annum between 1997 and 2003 (1) but if China is left out of the equation, that figure was just 1.3%. (2)

In 2001, the year that Chemetco disappeared from the map, one influential report noted, “Consumption figures may have changed dramatically in 2001, with China growing rapidly as a consumer of scrap copper in particular.” (3)

Yet China -- including Hong Kong and Taiwan -- was already the largest importer of U.S. scrap during the 1990s. (4) Now Chinese production will follow its own domestic demand and smelters in China will re-process new copper from industrial processes, as well as old scrap, in unprecedented quantities.

So, what market forces explain this ebbing of copper scrap away from the US?

The trend has recently been explained in these terms: “Domestically, the copper scrap market suffered in the late 20th century as [US] copper smelters... were the subject of great scrutiny by the United States Environmental Protection Agency. The closing of the Chemetco Inc. secondary smelter in Hartford, Ill., in 2001 marked the end of large-scale secondary copper smelting in the United States.” (5)

In fact, a total of five secondary copper refineries that were used by the federal EPA to set emissions standards for the industry have “shut down, and no similar secondary copper smelters have been constructed.” (6)

Chemetco produced about 50% of US copper output from non-mined sources.

But because the company was privately owned, it eluded celebrity even while it was providing a vital commodity to the United States' and international economies.

And for the same reason, it avoided widespread national and international notoriety, even once its felonies and previous record of sustained environmental delinquency had been uncovered. Even now, outside the copper industry, Chemetco still remains largely unknown beyond Madison County.

This is ironic. Just 100 facilities the size of Chemetco could supply the entire annual global copper output from all sources of copper. (7)

Fair-trade copper?

As domestic consumers, we don't have to think where “the red metal” comes from. We don't talk about copper in the mainstream. Like so many of the things we need, it's just there for us. And only those who have worked in or alongside the copper industry know about the unwanted by-products of refining, even if they don't want to shout about them.

Why should we even expect the copper smelters in developing economies to conform to the exacting standards that exist and are enforced only many thousands of miles away? And if we can't expect this, then what prospect for fair-trade copper?

Does it matter that we're not buying fair trade copper?

Or, even in the face of compelling arguments to the contrary (including the Chemetco case) should we just “keep a sense of proportion about the supposed unreliability of market signals”? (8)

That's to say, should we carry on believing that prices do reflect negative costs such as pollution and poor public health?

Two Sources of Air Pollution: Factories and Men with Drums

When the EPA already had very sharp teeth, copper smelters that poured old scrap into their furnaces could legally and openly use a grade of copper called “no. 2 wire” as much as they wanted to. An unquantified proportion of this grade of copper was prepared by people in poor rural areas. It's what they did for a living.

The “preparation” included the burning of old household and industrial electrical wire coated in PVC, in gasoline-filled oil-drums. The refineries didn't have to burn the copper themselves -- it was getting too risky from an environmental enforcement viewpoint -- but they still needed this feed badly, and created a demand for it. 

Illinois EPA enforcement veteran Chris Cahnovsky has described how a few years ago, the EPA began to target these small burners (9) noting that even though each made a relatively small impact, their collective burning produced dioxin and other emissions in worrying quantities.

This wire can only be produced by burning. It is traded internationally in colossal quantities, under the name “birch.” Why so desirable? Because its recoverable copper percentage is 94%, making it highly economic to refine, and because it's abundant wherever demolition and construction is taking place.

In nations where there are no environmental guardians, the rural poor may continue to burn wire in gasoline-filled drums. They may even have great open bonfires of the stuff. Fair trade copper? Really?

Should buyers of consumer products worry about any of this? Or should we shrug our shoulders and put it all down to structural changes in the market-place over which we have no control?

It's a question many may never think to ask. After all, three-quarters of the copper consumed in the United States is for electrical and electronic uses. (10)

Such copper is either hidden away from view (in cars, industry, data transmission networks and personal electronic goods) or is conspicuously shiny, making it seem the epitome of a “clean” product.

Copper's appearance hardly betrays the problematic conditions of its production.  But copper refinery production and environmental problems are inextricably linked, inside smelters, and out.

Alistair Siddons is a London-based writer and environmental journalist. He is a former AHRC scholar and works for a major broadcast media organization. His major study of the Chemetco criminal environmental case, “More Than a Water Pollution Story,” is published on:


(1) 'Copper 2004: Connecting Asia.' AME Research.

(2) Ibid.

(3) Recycling Today, April 1, 2002. “Copper at a crossroads: a survey of the copper industry reveals geographical shifts in production and consumption.” Excerpted from a technical report produced in 2001 by the Copper Development Association Inc. (CDA), New York.

(4) Ibid.

(5) Brian Taylor, Recycling Today, 1 January 2007. “Open valve: red metals scrap flows to destinations within the United States as well as to overseas consumers.”

(6) Ibid. Cites the 2006 US EPA report on National Emission Standards for Hazardous Air Pollutants (NESHAP) to the Federal Register.

(7) International Copper Study Group figure. Global copper production in 2000 was 15 million metric tons.

(8) Clive Crook, The Economist, January 22, 2005. “Profit and the public good: companies that merely compete and prosper make society better off.”

(9) Interview, 24 January 2005.

(10) Recycling Today, April 1, 2002. “Copper at a crossroads: a survey of the copper industry reveals geographical shifts in production and consumption.” Excerpted from a technical report produced in 2001 by the Copper Development Association Inc. (CDA), New York.