No resolution in sight

“If this plant is sold off in pieces and no one buys the environmental liabilities, then we’ll be left holding the bag.”

— French Broad Riverkeeper Phillip Gibson

Wrapped tighter than ever in an intricate financial web that so far has defied all attempts to unravel it, RFS Ecusta may never again spin out the fine flax paper it has produced since 1939 in Transylvania County, near the banks of the French Broad River.

On the surface, that bad news for Transylvania’s economy would seem to be good news for the river’s ecosystem, since the shutdown of papermaking operations has reportedly slowed the flow of chemical wastes from the plant. In fact, however, if Ecusta does shut down for good, decades’ worth of accumulated poisons may begin pouring into the river that’s a recreational resource and drinking-water source for thousands of mountain-area residents.

The fear that the plant’s owners will pull the plug has brought together a rare alliance of environmentalists, state regulators, mill workers and local officials in neighboring towns. The focus of their concern is a 75-acre wastewater lagoon that borders the confluence of the French Broad and Davidson rivers. The lagoon collects and treats runoff from the waste generated by Ecusta — notably the arsenic and heavy metals that leach from 16 acres of “sludge landfill” containing old coal ash. Ecusta’s electrically powered pumping-and-treatment system needs to run continuously, warns Mike Cody, the plant’s director of environmental health and safety. Otherwise, untreated toxic wastes will spill directly into the French Broad.

“There aren’t any financial assurances [in place] for the maintenance of the lagoon,” noted French Broad Riverkeeper Phillip Gibson in an interview shortly before the mill’s Feb. 18 bankruptcy auction (see sidebar: “Union officials left scratching heads”). If the Ecusta plant ended up shut down and carted off piecemeal, warned the RiverLink staffer (hired by the nonprofit to serve as “caretaker” for the French Broad), “then we’re left with a vacant property with environmental hazards” like the former Sayles-Biltmore Bleacheries property in Asheville — which is now an EPA Superfund site (see “The poisonous plume at Sayles,” Jan. 15 Xpress). State Division of Water Quality officials estimate it will take $75 million to $150 million to clean up the property.

The French Broad River — which provides drinking water to many residents of east Tennessee and may someday serve Asheville/Buncombe as well — already came dangerously close to a toxic spill last October, when then plant owner Nathu Puri and TransAmerica Business Capital Corp. cut off funding to the plant because of a disagreement over how to repay Puri’s creditors. After a rash of bad publicity, however, TransAmerica forwarded enough cash to pay the power bill and keep the system running.

It wasn’t the first time Ecusta’s owners had had to be prodded to protect the river. When Puri shut down the plant on Aug. 5 Cody became alarmed because Ecusta — in violation of state environmental regulations — had no management plan for maintaining its landfills after it closed. Cody — part of a skeleton crew of Ecusta employees kept on after the closing — notified Forest Westall, the regional head of the state’s Division of Water Quality, and also contacted Gibson for help. Upon learning from Ecusta’s management that they didn’t intend to maintain the landfills past the end of October, state officials obtained a court injunction forcing them to keep the environmental systems running.

Cody’s whistle-blowing earned him a threat from Steven H. Smith, the chief financial officer whom Puri had brought in to run the plant when he bought it in 2001. Believing that Cody had fed information about Ecusta’s environmental problems to Hendersonville Times-News reporter Mark Todd, Smith warned Todd in an e-mail that if Cody continued making “unauthorized releases,” he would be fired, Todd told Xpress, noting that the information had actually come from Gibson. In an e-mail to Xpress, however, Smith wrote, “We must make sure [that] neither the Davidson or French Broad are polluted.”

Meanwhile, it appears that the state is also monitoring these developments closely. “We’re keeping a continuous eye on this situation, and we’re aware of the current status and will certainly move to enforce the terms of the consent judgment,” David Blackwell of the state attorney general’s office told Xpress. He declined to comment specifically on a clause in the court order that both Cody and Gibson believe requires Puri to continue maintaining the wastewater system even if the plant permanently ceases operations.

To help ensure that future multinational financiers aren’t able to walk away from their obligations to the local environment, Gibson, Cody and local business leaders are planning to meet to discuss possible proposals, Gibson reports. Considering Puri’s track record of allegedly gutting and then closing long-running paper and plastics plants in Great Britain, observes Gibson, “It appears as though Puri is a corporate raider.” (That record includes the two Robert Fletcher paper mills Puri led into bankruptcy in 2001 — one of which, the Stoneclough plant, had been continuously operating since 1823, according to the Lancashire Evening Telegraph. The Hendersonville Times-News reported last November that, of 30 companies owned by Puri’s Melton Medes Group, 10 were in various forms of bankruptcy.)

“If you had a review process in North Carolina — not of every small business, but of large facilities that have this kind of an impact on everyone else, downstream or immediately — we need to have an environmental review of that company. There already is an economic review — lenders or financial institutions review companies before they give money — but we need to review before we give [pollution] permits.

“What Mike [and I] want to see happen is that this not be something that is directed from the top down [by the government], but rather there is an issue that the business community has already identified, and they are requesting assistance on how to make sure this never happens again.” Gibson said he wasn’t at liberty to identify the business leaders who had approached him.

Hope Taylor-Guevara of Clean Water for North Carolina, a nonprofit environmental group, complains that Ecusta “is the tip of the iceberg. … We feel that [pollution] permits are being handed out like candy.” To prevent the state — and taxpayers — from being saddled with the full costs of cleaning up the mess polluting industries leave behind when they close, Taylor is working with legislators in Raleigh on an initiative that would require polluters to post a bond with the state before receiving a permit.

“The bottom line,” says Gibson, “is that if this plant is sold off in pieces and no one buys the environmental liabilities, then we’ll be left holding the bag.”

Flax for that fresh, clean taste

If Ecusta were shut down permanently, the French Broad might run a little bit cleaner (as it already is, now that operations at the paper plant have been suspended, acknowledges Cody). Its loss, however, could leave a significant hole in the papermaking industry’s bigger environmental picture. Whereas most paper mills manufacture their products from wood pulp, Ecusta has long relied instead on the pulp of annual agricultural crops. It was one of the two largest paper producers in the world using flax — the same plant from which linen is spun — to make “specialty papers” for cigarettes, Bibles and other items (including, according to a photo on its Web site, Lipton teabags and those little paper cups that hold Reese’s candies). Ecusta’s closure leaves Schweitzer-Mauduit International’s Spotswood, N.J., mill as the sole American producer of flax paper.

Making specialty paper out of flax is a much cleaner, more environmentally friendly process than making paper out of trees.

“Flax is nearly pure cellulose,” explains Norman Liebergott, an internationally known paper consultant based in Canada who recently helped Blue Ridge Paper Products in Canton further improve its procedures for cleaning up waste discharges. Compared to the elaborate and “much dirtier” process required to dissolve wood pulp into cellulose for specialty paper, he told Mountain Xpress, “flax does not have as much [waste] material that is objectionable. … When you use the wood pulp [for specialty papers], you have a lot of material that’s going to get dumped.”

Until recently, however, the trend in the paper industry, Liebergott and other experts say, has been to turn away from flax and toward the use of wood pulp for specialty papers. As other, larger sectors of the paper market become saturated, pulp-paper mills have begun moving into the specialty-paper niche. And even though flax-paper makers use waste flax straw that’s practically free — Ecusta’s Canadian processing facility got its supply from farmers who would otherwise have burned it off their fields — the much larger wood-pulp producers, using sawdust from saw mills and chip mills, are still able to produce cheaper paper (though at the expense, environmentalists complain, of forest ecosystems — not to mention whoever foots the bill for cleaning up the environmental impacts).

But wood-pulp cigarette paper, it seems, just doesn’t taste the same — and that, says fiber magnate Frank Riccio Jr., president of Danforth International, is now driving cigarette manufacturers back to flax. Tobacco conglomerate RJR Nabisco originally led the cost-cutting switch to wood pulp following its acquisition by buyout giant Kohlberg, Kravitz and Roberts (as made famous by the book Barbarians at the Gate: The Fall of RJR Nabisco, by Bryan Burrough and John Helyar). Smokers, however, have been stubbing out RJR’s products in noticeable numbers — preferring, says Riccio, to puff on cigarettes made by Philip Morris and others who never abandoned flax paper.

Tree-free-paper producer tried to buy Ecusta

In Riccio’s view, the industry’s long-term future lies not in wood pulp but in the cellulose-rich fibers of annual crops — including not only flax but also wheat stalks, rice straw, bagasse (sugar-cane waste), kenaf and hemp.

In fact, Ecusta’s advanced flax-paper capability is what led Riccio to try to buy the plant from former owner P.H. Glatfelter twice: once about 10 years ago, and again just before it was sold to Puri.

Riccio and his 35-year-old company — one of the world’s largest producers and suppliers of nonwood fiber and pulp — are well known among manufacturers and advocates of “tree-free paper.” Carolyn Moran, the founder of Living Tree Paper Co. (which supplies hemp paper to Staples Office Supply), publicly credits Riccio with having inspired her to start her business.

Riccio didn’t bid at Ecusta’s Feb. 18 bankruptcy auction. In an interview several weeks earlier, however, he commented on the environmental virtues of alternative fibers in papermaking, a subject he called “near and dear to my heart.”

Danforth, he noted, has “always been involved in what is known as the specialty-and-technical sector of the industry. The specialty-and-technical sector worldwide has continued to use the nonwood fibers and pulps. … There is a place for that technology within the realm of environmentally compatible pulp and papermaking. So it’s by default, if you will, that we fall into the area of being environmentally friendly.”

Would Riccio support a proposal now making the rounds in Raleigh that polluting companies be required to post a bond to ensure that the environment would be protected if they closed down?

“It’s an interesting concept,” said Riccio. “We have to be held accountable for those issues — all of us, everyone — and certainly everyone in industry has to be held accountable for their actions.”

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