For more than a decade, operators of the two sugar mills along the Hamakua Coast Hamakua Sugar Company, with a mill at Haina, and Hilo Coast Processing Company, with a mill at Pepe`ekeo have protested Environmental Protection Agency requirements that they clean up cane wash water before discharging it to the ocean.
They have received, first, a four-year-long reprieve from compliance requirements, promulgated in 1975 but not imposed on the companies until 1979. Six months after that, they received a roll-back on the standards, allowing significantly more soil in their discharges than before and making their standards the most relaxed in the entire United States.
Starting in 1991, they have been receiving a federal subsidy averaging about $70,000 a month to help them with the costs of removing soil from the wash water.1 And in 1989, the EPA spent $500,000 conducting a study to determine whether the standards should be relaxed even further.2
Despite all this, the Hamakua Sugar Company is facing civil penalties of up to $2 million and possible criminal charges as well for its failure to meet the EPA’s clean–water standards.
Elusive Compliance
For almost as long as its discharges have been subject to regulation, Hamakua Sugar Company has had difficulty meeting discharge standards. Confronted with the company’s own monthly discharge monitoring reports, indicating ongoing violations of both the daily maximum limits as well as the monthly average limits, the state Department of Health issued a notice and finding of violation to HSC on February 27, 1995.
That notice and finding of violation, signed by Bruce Anderson, deputy director of the Health Department, provides some indication of the scope and intractability of the problem. It notes that in June 1990, for example, while the maximum limit on suspended discharges in one day is 9.9 pounds for each 1,000 pounds of gross cane processed, Hamakua Sugar’s reported “daily maximum” was 74.8 pounds – not quite eight times the permitted level. That same month, the 30-day average limit of 3.6 pounds per 1,000 pounds gross cane was overreached also by a factor of nearly eight, with HSC’s reported 30-day average being 28 pounds per 1,000 pounds gross cane.
The document notes also several incidents of settling ponds overflowing, causing the release of unknown quantities of mud into the adjacent gulch. On one occasion, the company reported that a “mud bin gate broke, sending tons of mud into the gulch on January 14, 1991.”
The notice informed HSC that it was subject to penalties up to $10,000 for each day in which the company was in violation of its permit. With more than seven month’s worth of violations, the company was faced with the prospect of a maximum fine exceeding $2 million assuming no more than one violation per day.
Hired Guns…
The response of Hamakua Sugar Company was to retain one Keith A. Onsdorff, a Washington lawyer, to negotiate with the state over the amount of penalties. Onsdorff is well qualified from 1984 to 1987 he was civil enforcement counsel for the EPA. In March 1987 he joined the EPA’s office of criminal enforcement. By the time he left that office in October 1990, to enter private practice, he had risen to the post of its director.
Onsdorff’s first letter to the Department of Health, on April 15, 1991, indicates his own understanding of the problem. “We may both agree that the State’s intentions and enforcement policies do not justify any real concern by the company that the civil penalties which the state may eventually impose either reach or are within orders of magnitude [of] the statutory maximum,” Onsdorff wrote. “Unfortunately, in the absence of a firm penalty assessment claim at this juncture, Hamakua must assume that its potential exposure is in excess of $2 million, and must prepare its defense accordingly, even if there is very little likelihood of such a large assessment.”
To deal with this, Onsdorff recommended a “bifurcated adjudication process,” in which first the liability claims could be settled first, thus setting an upper limit on penalties that would be substantially less than $2 million. Negotiations involving Onsdorff, attorneys in Honolulu with the firm of Carlsmith Ball Wichman Case Murray Mukai & Ichiki, and deputy Attorney General Larry Lau for the state have been going on intermittently since that time. A settlement was said to be close at hand at the time Environment Hawai’i was going to press.
Holstered Pistols
The potential criminal charges may prove to be more difficult to resolve. At issue is more than the level of discharges over and above the permitted limits. According to sources within the Environmental Protection Agency, the subject of the criminal investigation is the possibility of an intentional illegal bypass of the wash water treatment system.
That investigation made the headlines in November 1990 after about so EPA agents, bearing sidearms, handcuffs, and a search warrant, raided HSC’s offices. At no time were their weapons drawn, but Francis Morgan decried their police tactics and compared the EPA investigators to the Gestapo. A spokesman for Hamakua Sugar Company told Environment Hawai’i that actually, the raid resulted more from ongoing disagreements over enforcement between the state Department of Health and the federal EPA than from any possible violation on HSC’s part. The EPA, in other words, wanted to make the state look bad, and Hamakua Sugar became the unfortunate vehicle.
That explanation is of a piece with the consistent response of the company to concerns over damage to the marine environment that may be caused by its discharges namely, to deny that any significant impact results. Company officials are quick to point out that discharges from the Haina mill amount to just 3 percent of all the mud discharged into the ocean off the Hamakua Coast, with the preponderance of the remainder being the natural runoff carried by streams.
Contrary Views
If one assumes that those figures are correct, what the company is acknowledging is far from an inconsequential impact. The Hamakua Coast extends for more than 30 miles; to have 3 percent of the total runoff concentrated in one six-square-mile zone of mixing might be expected to result in some measurable harm to the off-shore environment.
And, indeed, that is what the EPA found when it carried out the $500,000 study mandated by Congress. The EPA report concluded:
“The existing discharges cause substantial environmental impacts including elimination of coral and other benthos in areas surrounding the discharge points at both mills [Hamakua Sugar and Hilo Coast Processing Company], and significant reduction in coral and other benthos within the mixing zone at HSC, and within and beyond the mixing zone at HCPC. Therefore, a beneficial use of the receiving waters, support and propagation of aquatic life, is being impaired by the discharges and thus violates narrative WQS [Water Quality Standards] within the mixing zones.
“The impact of natural stream runoff on coastal waters is substantially smaller, less severe, and different in character than the impact of sugar mill discharges. Data are not available, however, for direct quantitative comparison. Sugarcane cultural practices cause soil erosion which contributes to nonpoint source discharges to both streams and coastal waters…
“The increased level of discharge proposed by the mills (up to 49-fold increase in TSS total suspended solids loadings for one mill and up to 70-fold increase in loadings for the other mill) would substantially increase the areas of impact on corals and other benthic life, extending those impacts beyond the existing mixing zones… The currently permitted mixing zones are one to three orders of magnitude larger than the mixing zones for seven industrial and four municipal discharges in Hawai’i with comparable or substantially larger flows.”
The EPA findings were at odds with a 1985 study financed by C. Brewer & Co. (a principal in HCPC) and Theo H. Davies & Co., Ltd. (owner of Hamakua Sugar before its sale to Morgan). That study, undertaken by Richard W Grigg, a marine biologist at the University of Hawai’i’s Institute of Marine Biology; concluded that although there might be significant impacts associated with mill discharges, those impacts were reversible. “Plumes associated with natural streams can be as large as those caused by sugar mills,” Grigg wrote. “In conclusion, the major finding of this study is that, with the exception of bagasse removal, the present discharge regime offers no real or significant ecological advantages or improvement over practices used in 1971.”
A ‘Biased Report’
Grigg’s study, along with other several other studies by UH researchers, was cited by Morgan in his response to the EPA study. In a letter to Harry Seraydarian, director of the EPAs Region 9 Water Management Division, following the release of the EPA study, Morgan wrote:
“I have carefully reviewed this report and I have reluctantly concluded that it is a biased report, designed primarily to discourage the granting of any relief.
“While the task force completed an extensive study… the final report ignored or suppressed much pertinent information supporting the granting of relief and exaggerated or distorted data negative to the granting of such relief.” Morgan notes that the EPA report says the reason the mills were seeking relief was economic hardship. “While this is true,” Morgan writes, “an essential feature of this request is the sincere conviction on the part of the mills that the waiver would not cause any appreciable degradation to the marine environment.” A conviction, he says, based on the work of Grigg and another UH biologist, Steve Dollar.
According to Morgan, “without treatment, the primary difference [in marine impact] is that the heavier soil particles are included in the effluent and these particles sink to the ocean floor the fastest and do not drift out to a wider area. It is the fine colloidal material which drifts out and this visible plume has no environmental impact. Therefore, the primary impact of discontinuing treatment is that a heavier layer of mud would be deposited on the largely barren ocean floor. Accordingly, the impact would be nowhere near as significant as implied by [the EPA’s] conclusion.”
Dirty Dumping
At the same time Morgan was taking exception to the EPA report, he was also applying to the state Department of Health for renewal of the National Pollutant Discharge Elimination System permit for the Haina mill discharges. With the EPA study in hand, the DOH and EPA were not favorably disposed to Morgan’s suggestion that they relax the discharge standards – standards that, assuming no violations, upsets or exceedances, result in approximately 12 tons per day of soil entering the ocean off Kahaupu Gulch and cause levels of heavy metals (arsenic, copper, lead and mercury) in the off-shore waters to exceed a number of EPA criteria.
According to the EPA report, if the bagasse and most of the larger stones were all that were removed from the wash water before discharge, “the total suspended solids discharged to the ocean would increase from approximately 13 tons/day to 656 tons/day at HSC, an increase of about 50 times.” With removal costs averaging around a quarter-cent per pound (a rate that, according to the EPA, is “at least an order of magnitude less than the cost for sugar processors elsewhere”), the savings that would result from relaxed treatment requirements would be around $653,500 a year for HSC. (The per-pound cost for treatment would actually rise, however, to three-tenths of a cent.)
As the EPA report noted, “costs of this magnitude are fairly small when expressed as a percentage of all operating costs… They are, however, a significant share of the economic surpluses generated by the mills…. Without reduced wastewater treatment and the attendant cost savings to the companies, the date of closure maybe marginally accelerated. However “EPA does not believe it would be correct to attribute the closure of the mills and the associated impacts on workers and suppliers” to the requirement that they meet “best practicable treatment” standard.
When Hamakua Sugar’s NPDES permit was finally renewed in September 1991, the standards held firm. According to a spokesman for the company, they are continuing to seek reduced treatment standards and other relief through the appeals process.
1 This grant, under the guise of a “job retention program” placed by Senator Daniel Inouye into the budget of the Department of Housing and Urban Development, has recently been targeted for recission by President Bush in his campaign against what he calls pork-barrel projects. Whether Congress will override Bush’s action cannot be known at this point.
2 See the EPA’s “Report on the Evaluation of Wastewater Discharges from Raw Cane Sugar Mills in the Hilo-Hamakua Coast of the Island of Hawai`i,” August 11, 1989. This will be identified henceforth as the EPA report.
Volume 2, Number 10 April 1992