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Corrupt Executives Sent To Prison For Pumping Toxic Leaded Fuel Overseas
Perry Gottesfeld, Executive Director of the IPEN Participating Organization OK International, is quoted in this story from the Huffington Post:
Lynne Peeples (email@example.com)
On Nov. 22, 2006, Paul Jennings received an email from a fellow executive at his chemical company. "As you are aware, Indonesia was planning to go lead free in 2000," the note read. "This obviously did not happen for a number of reasons and since 1st January 2000 until the present, we have supplied 28,390 [tons] of [tetraethyl lead] ... generating $277 million in revenue."
Today, Jennings is one of three former employees of the Associated Octel Corporation (renamed Innospec) behind bars. They were sentenced Monday in a London court for bribing Indonesian -- and in Jennings' case, Iraqi -- government officials to continue their nations' importation of a toxic product banned across most of the world.
The American-owned corporation's scheme to sustain profits for its tetraethyl lead fuel additive, which involved millions of dollars in illicit payments between 2002 and 2008, helped to delay the phase-out of leaded gasoline.
Lead's health harms, especially for children, have been known for more than a century. Decreased IQ and increased violence are among the most well-documented risks. Yet today, according to the United Nations Environment Program, cars and trucks in Iraq, Afghanistan, Algeria, Myanmar, North Korea and Yemen can still legally burn gasoline with the heavy metal compound added to prevent engine knock. (Unleaded anti-knock options were recognized before tetraethyl lead became the systemic addition to the automobile fuel recipe in the 1920s. Unfortunately, those alternatives proved less profitable.)
The situation baffles and frustrates environmental health experts.
"What on earth is going on that this continues? We've had so much bad experience with the use of lead in gasoline," said Howard Mielke, an expert in lead poisoning at Tulane University School of Medicine.
"Apparently, it is an extremely lucrative product," he added.
Leaded gasoline is not the only product that has been pulled from developed nations' shelves, only to appear in open markets elsewhere -- often in poor countries where few regulations protect public health. Laws need not always be broken in the process.
In the late 1970s, U.S. companies were found to have dumped millions of children's pajamas treated with toxic flame retardants on developing countries after the retardants were banned in the U.S. Around 1.7 billion pounds of pesticides were exported from U.S. ports between 2001 and 2003, nearly 28 million pounds of which were products forbidden in the U.S., according to the trailer for the film "Toxic Profits." And in 2011, according to the United States Geological Survey, the U.S. exported about $27 million worth of asbestos products.
Perry Gottesfeld, executive director of the nonprofit Occupational Knowledge International, has uncovered high lead concentrations in paints sold in developing nations. He found at least one overseas lead-based paint manufacturer that was owned by a U.S. company. (The U.S. government banned lead paint for residential use in 1978, although estimates suggest there are millions of American homes that were built and painted prior to the ban.)
"If you look at the historical behavior of the [leaded fuel] industry and the lead paint industry, you see some similarities," said Gottesfeld. "The history here is long and poor in terms of how they propped up the use of lead."
Overall, the developing Asia-Pacific region now makes up the largest market in the world for paint. A recent study found that 76 percent of the paint sold in that region contains high levels of lead, well above the U.S. regulatory standard.
Indonesia is one notable example of an impoverished country hit from multiple sides by corporate bullies. Its people still face exposure to banned paints and pesticides in addition to their fraudulently extended exposure to leaded gas.
"When these improvements to the environment such as the adoption of unleaded fuel take place, it is usually the developed nations that are able to implement them first," British Judge Andrew Goymer said in his sentencing remarks on Monday. "The developing nations in the Third World, as it is often called, struggle because of their economically inferior position, and they struggle to keep up with this progress and development."
Goymer called Indonesia a "case in point," suggesting the country's drive to go unleaded was "progressively put back and not finally achieved until 2006."
"This was a direct consequence of the activities of this company and these defendants," the judge said.
Brian Watts, vice president of Innospec, declined to comment on Monday's sentencings. He said that his company continues to sell tetraethyl lead for automobile gasoline in just one country, Algeria, which plans to phase out its use in 2015. The company also claims that it is the only remaining manufacturer of tetraethyl lead in the world, although unconfirmed rumors circulate about potential producers in China and elsewhere.
Watts also declined to comment on the continued sale, in any country, of a product long known to be toxic.
"The executives who were prosecuted were fully aware of the risks associated with tetraethyl lead," said Kathleen Hamann, a former Department of Justice prosecutor who led the U.S. side of the Innospec investigation. This is a case, she added, where "corruption and environmental degradation hit head-on."
Hamann cautioned that a country going unleaded is not something that can happen overnight, especially if its roads are still full of cars that run on leaded fuel. "There has to be a transition period," she said.
Still, she and other experts are making no excuses for Innospec's criminal behavior that prolonged that period.
"The company's line and the defendants' line was that there was an economic necessity or imperative in Indonesia," said Ben Morgan, joint head of Bribery and Corruption at the U.K.'s Serious Fraud Office, which co-investigated the bribery case with the U.S. Justice Department. "The judge described that as a convenient and cynical excuse for corruption."
Morgan also suggested that the verdicts against individual executives sent "a very significant message" concerning white collar crime. "It's not enough that the company pays the price," he said. "The people who are the arms, legs and mouth pieces of that company will face the consequences of their actions."
Even after these last few nations finally do make the switch, said Tulane's Mielke, their people will continue to suffer the consequences of delay.
When the U.S. phased out its use of tetraethyl lead in automobile gasoline during the mid-1970s -- again, many decades after the risks were documented -- cars and trucks had already spewed some 6 million metric tons of lead into the environment, he noted. Heavy metals never break down, so much of that lead lingers in the soil and even inside homes. Leaded fuel also still powers fleets of propeller airplanes in the U.S., further adding to the accumulated contamination.
Mielke laments the slow speed at which the U.S. has worked to abate the "invisible" problem, such as by replacing contaminated soils. "We have the infrastructure, and we're not using it," he said.
"Developing countries do not even have the infrastructure to begin with," said Mielke. "So they're handicapped, and then they are going to be handicapped further from the poisoning."
CORRECTION: A previous version of this article misspelled the last name of former Justice Department prosecutor Kathleen Hamann.