According to Washington state regulations, cleanup of environmental messes is shouldered by the company that created them in the first place. But in the case of Port Gamble Bay, Pope & Talbot Inc. can’t afford to clean up the wood debris and toxic run-off created by its 150-year-old sawmill operation.
On May 9, a ruling by the U.S. Bankruptcy Court approved a request from Pope & Talbot, which is headquartered in Oregon, to move to a Chapter 7 company, putting assets in the hands of a court-appointed trustee for auction and liquidation. This decision came after the company’s reorganization efforts failed to revitalize the company under its preexisting Chapter 11 title.
In November 2007 Pope & Talbot also received protection from the Canadian Companies’ Creditors Arrangement Act by filing for bankruptcy in Canada, where it owns additional timberland and mill sites.
According to the state Department of Ecology, the mill’s manufacturing activities in Port Gamble Bay released petroleum, carcinogens and metal contaminants into the soil and groundwater.
The Department of Ecology is taking public comment through June 9 concerning the cleanup of two sites in the bay, nominated a top priority of the Puget Sound Initiative, a funding plan created by Governor Christine Gregoire to cleanup toxic chemicals and restore Puget Sound’s waterways.
“Part of our problem is that we are right at the beginning in trying to understand the problem in Port Gamble Bay but bankruptcy rules forces us to find out the costs of the cleanup,” said Tim Nord, manager of land and aquatic lands cleanup sections for the Department of Ecology. “We had to give an educated estimate but it could change.”
The two sites, the sawmill site and leased area site, have mid-range estimates of $9.1 million and $53 million respectively, he said.
According to the Department of Ecology, the sawmill site is located at the mouth of the bay where most of Pope & Talbot’s operations, including wood chipping, log transferring, rafting and storage, were carried out between 1853 and 1995.
The other site, the ‘leased area,’ located at the southwest end of the bay, is aquatic land owned by Washington State Department of Natural Resources. DNR leased the 74 acres to Pope & Talbot for log storage between 1974 and 1995.
“Because Pope and Talbot claimed bankruptcy, the bankruptcy court will look at their remaining assets,” said Jim Harmony, bankruptcy lead attorney representing the Department of Ecology. “They (Pope & Talbot) are still are responsible for paying for the cleanup as well as other POPs (potentially liable parties).”
Potentially liable parties consist of Pope Resources two managing arms, Olympic Property Group (OPG) and Olympic Resource Management.
Pope Resources bought the sawmill site from Pope & Talbot in 1985 but continued to lease the land until the mill closed in 1995.
Harmony said each party is responsible to pay their respective part for the cleanup.
Between 2002 until Pope & Talbot filed for bankruptcy, the company completed two series of dredging projectes in the bay to remove wood waste with the help of OPG.
“By far, the biggest portion of work left to be accomplished is continued clean up of wood waste sediments from Port Gamble Bay,” said OPG President Jon Rose in a press release. “This was work Pope & Talbot was responsible for under an agreement between the two companies. Unfortunately for us, Pope & Talbot went into bankruptcy this year and is no longer contributing to the effort.”
Multiple phone calls to Pope & Talbot’s attorneys were not returned.
Harmony said there are previous cases of environmental polluters claiming bankruptcy to avoid having to pay for cleanup efforts including Asarco LLC Superfund sites in Everett and Tacoma in 2002.
Last January Senator Maria Cantwell championed a bill that would make it harder for agencies to claim bankruptcy to evade pollution cleanup by passing it on to its subsidiaries or taxpayers through bankruptcy claims.
“As far as environmental polluters claiming bankruptcy, it doesn’t happen often but it does happen enough to be a concern,” Harmony said.
