BUILDING CASE “NORILSK NICKEL POLLUTION”

BUSINESS ETHICS

BILINGUAL CLASS

QUIS 1 - BUILDING CASE

“NORILSK NICKEL POLLUTION”

BASED ON CHAPTER 5

BY :

FELICIA MONIKA

1511011032

S1 MANAGEMENT

ECONOMICS AND BUSINESS FACULTY

UNIVERSITY OF LAMPUNG

2016/2017

ANALYSIS

INTRODUCTION OF THE POLLUTION IN NORILSK

• Potentially Affected People: 134,000
• Type of Pollutants: Air pollution - particulates, sulfur dioxide, heavy metals (nickel, copper, cobalt, lead, selenium), phenols, hydrogen sulfide.
• Source of Pollution: Major nickel and related metals mining and processing

Nickel ore is smelted on site at Norilsk. The smelting is directly responsible for severe pollution, generally acid rain and smog. By some estimates, 1 percent of global emissions of sulfur dioxide come from Norilsk's nickel mines. Heavy metal pollution near Norilsk is so severe that mining the surface soil is now economically feasible due to the soil acquiring such high concentrations of platinum and palladium.

An industrial city founded in 1935 as a slave labor camp, the Siberian city of Norilsk, Russia is the northernmost major city of Russia and the second largest city (after Murmansk) above the Arctic Circle. Mining and smelting operations began in the 1930s and this city now contains the world's largest heavy metals smelting complex, where nearly 500 tons each of copper and nickel oxides and two million tons of sulfur dioxide are released annually into the air. The city has been accused of being one of the most polluted places in Russia, where the snow is black, the air tastes of sulfur and the life expectancy for factory workers is 10 years below the Russian average. A 1999 study found elevated copper and nickel concentrations in soils in as much as a 60 km radius of the city.

Norilsk Nickel, the firm responsible for the pollution, is one of Russia's leading producers of non-ferrous and platinum-group metals. It controls one-third of the world's nickel deposits and accounts for a substantial portion of the country's total production of nickel, cobalt, platinum, and palladium. It also ranks first among Russian industrial enterprises in terms of air pollution. The plants were constructed during the Soviet era, a period of non-existent environmental standards or controls.

The Blacksmith Institute included Norilsk in its 2007 list of the ten most polluted places on Earth. The list cites air pollution by particulates (including radioisotopes strontium-90, and caesium-137 and metals nickel, copper, cobalt, lead and selenium) and by gases (such as nitrogen and carbon oxides, sulfur dioxide, phenols and hydrogen sulfide). The Institute estimates four million tons of cadmium, copper, lead, nickel, arsenic, selenium and zinc are released into the air every year.

The Russian Federal State Statistics Service named Norilsk the most polluted city in Russia. In 2010, Norilsk produced 1.924 million tons of carbon pollutants, nearly six times more than the 333 thousand tons generated by Russia's second most polluted city, Cherepovets.

According to an April 2007 BBC News report,  Norilsk Nickel accepted responsibility for what had happened to the forests, and insisted they were taking action to cut the pollution. They should responsible to this situation. The company must take an action to reduce the pollution, because the pollution is very dangerous. For the period up to 2015–2020 the company expects to reduce sulfur dioxide emissions by approximately two-thirds, but claims it is hard to guarantee this pace of reduction because they are still developing the technology.

In September 2016, images surfaced on social media of the nearby Daldykan River which had been turned red. Russia's Environment Ministry issued a statement claiming that preliminary evidence pointed towards wastewater pipes from a nearby smelting plant owned by Norilsk Nickel. But in this situation the company had dodged that they caused the red-river.

HEALTH IMPACTS

The pollution is very dangerous. The effect of the pollution can make our body become un healthy. The toxic in the air or water can caused many kind of disease. The worst is the pollution can caused death and disturb people life. Many people will be harmed because of this condition. A good company supposed to consider the health impact of their company activity. The management of company have to make sure that their activity is in accordance with safety or environmental standards.

Emissions from Norilsk Nickel pollute groundwater, rivers and lakes, in addition to those emissions carried by air. The local population is severely affected by the air quality where air samples exceed the maximum allowable concentrations for both copper and nickel. Children suffer from numerous respiratory diseases. Investigations evaluating the presence of ear, nose and throat diseases among schoolchildren revealed that children living near the copper plant were twice as likely to become ill than those living in further districts.

Similarly, children living near the nickel plant were shown to become ill at a rate 1.5 times higher than children from further districts. Mortality from respiratory diseases is considerably higher than the average in Russia, accounting for 15.8% of all deaths among children. Premature births and late-term pregnancy complications are also frequent. Sulfur dioxide emissions contribute to chronic diseases of the lungs, respiratory tracts, and digestive systems - and can result in lung cancer.

In the areas near Norilsk Nickel’s activities on the Kola Peninsula, the proportion of respiratory diseases is far higher than elsewhere and life expectancy is lower. According to official Russian figures, there is a higher incidence of disease in children and higher rates of miscarriages and premature births. Since November 2001, Norilsk has been shut to foreigners, one of 90 "closed towns" in Russia where Soviet-levels of secrecy persist.

STATUS OF CLEAN-UP ACTIVITY

According to company reports, Norilsk Nickel has worked consistently to reduce emissions of major air pollutants. In 2006, the company reported investment of more than US $5m to maintain and overhaul its dust and gas recovery and removal systems. It asserts a commitment of nearly US $1.4m for its air pollution prevention plan. However, official statistics state that emissions remain extremely high.

Norilsk Nickel has been amenable to Blacksmith Institute's efforts to investigate the plant and facilities. Blacksmith representatives visited the site in July of 2007 and confirmed that, indeed, the company was making significant efforts to address the level of emissions. Norilsk Nickel stated their intention to move the nickel plant inside the city to a plant just outside. They also aspire to reduce the volume of sulphur dioxide emissions to 400 thousand tons by 2015 (which would result in normal atmospheric air) but admit that goal deadline is an extremely ambitious one.

Blacksmith staff also met with leading experts on environment and health while conducting this recent site assessment. These local experts confirmed extremely high levels of atmospheric contamination. They reported that although there have been some reductions in pollution levels, levels of SO2, HS, phenol, formaldehyde, and dust had increased; levels of nickel and copper had increased by 50%. Morbidity rates are stable and death rates are decreasing.

Their reports on children's health confirmed much higher rates of respiratory, digestive and nervous illnesses and more abortions and premature births than other cities in the region. Incidences of cancer (especially lung) have increased. Some estimates state that air pollution is responsible for 37% of children's morbidity rates and 21.6% of adult morbidity.

THE ETHICS OF POLLUTION CONTROL

Ethically, the company should recycle the waste first before they throw it away. The objective is to avoid a pollution. If the company just throw it away without recycle it first, it will be dangerous whether it’s will contaminated the air, water, soil, etc. better for us to prevent than to tackle. Because when we already did a mistake with the pollution, we must pay so much thing, the expensive one is we have to pay the others human life. Why ? because by did a pollution, it means there is a possibility for us to kills them one by one. That is so scary. So the company shouldn’t play with this condition. They have to control this situation, they must take a control of the pollution.

Talk about ethics, this situation is unethics condition. So the company must take an action to control it. Their objective must be set, the main idea of their objective supposed to make the unethics condition become an ethics condition. The reality is not as simple as the word. Government also should take a big role in this case. Sometimes when the people angry to the company, they didn’t care. But id the government that angry to company, they will scary. So as an important party, government has a important role to solve this problem.

Actually government must give the company a punishment. To make the company fix their waste system management. If the government let this bad condition happen. It will distrubing the government itself. Because the number of death will increase because of the toxic. The number of birth will decrease because many woman is not in a healthy condition to have a baby. And the number of poverty near the company location will decrease because they are not productive anymore.

They can not take care the sustainability of life, imagine how about 20 or 30 years later. Is there a people in that city ? I don’t think so. Because the number of birth is low, and for the alive baby, I don’t think that they have a health body. Because the pollution really affect the baby condition, that may led them to have a unhealthy condition.     

PRIVATE AND SOCIAL COSTS

The company runs a large surplus, but the willingness to invest in environmental measures and treatment technology is not at present. The company should pay some money to invest in environmental, because they caused a pollution. they caused a pollution, it means they disadvantageous many people. So that they must responsible with that condition, there is social costs that they have to pay. They responsible to the sustainability of the environment and also the human around the company. If they don’t take a good care of this situation, at the end they must pay higher. Because if they last with they thought, they will be bankrupt.

The closure of the nickel factory in May of last year was estimated to cost some $300 to $500 million by Pavel Fyodorov, Norilsk Nickel’s deputy director told RBK news (in Russian). The company held negotiations with the government for joint financing. Fyodorov estimated the economic effect of the modernization project to be some $450 million a year, and added that the program would improve Norilsk’s dismal environmental circumstances.

According to company reports, Norilsk Nickel has worked consistently to reduce emissions of major air pollutants. In 2006, the company reported investment of more than US $5m to maintain and overhaul its dust and gas recovery and removal systems. It asserts a commitment of nearly US $1.4m for its air pollution prevention plan. However, official statistics state that emissions remain extremely high.

With that program and also the money still cannot reduce the emission, because the reality shows that the emission is extremely high. It means the company must  find another way to reduce it. We know that this activity costly, but we cannot hide from the reality. The company have to fix it, before it too late. Because if the company think too much about cost, they maybe will not fix this problem.

The company should think about the next generation. Don’t give them a damaged environment as a heritage. This is the social costs that the company have to pay. They must prepare a good environment for the next generation, because this is their responsibility as a damaging party.

ALTERNATIVE APPROACHES TO POLLUTION

Many thinkers claim that the environmental crisis we face is rooted in hierarchical systems and social dominance that characterize our society.When we think we own a company, the thing that we must consider is not just the profit and the product. We also have to consider the people in and out the company, the environment and also the ethics in doing the businesses. The reason of pollution is comes from our self. If we have a good mind, we will not let the pollution happen. We will try to make the condition is good, even there is a mistaken, we will fix it as fast as possible to make it better.

The social ecologist like Bookchin state that human must see their own self as a caretakers of nature, not rulers of nature that dominate. From the ethics perspective, the damage of nature must be replace with giving attention and maintain relationship with nature and living life. That is the company supposed to do. They have to positioned their company as a caretaker of nature. If they have that thought, I believe they will not the pollution happen. If the environment dominate with the company’s thought, we cannot change the situation. Because that is their characteristics.  

THE FAILURE OF ENVIRONMENTAL SUSTAINABILITY

Rinat Gizatulin, Russia’s Deputy Minister of Natural Resources and the Environment, has demanded that Norilsk Nickel – the world’s biggest nickel producer and one of its most polluting industries ­­– undertake comprehensive measures to bring its vast empire into line with environmental law.

The demands specifically target the Zapolyarny subsidiary of the company, which is based the northern Siberian city of Norilsk – routinely ranked by numerous studies as one of the most polluted places on earth.

Life expectancy among Norilsk’s 170,000 residents is 10 years shy of Russia’s average. They suffer high rates of cancer, lung disease, blood and skin disorders. Those in Norilsk who work at the local industry endure pollution, heat, and noise, and have to use masks or breathing tubes connected to oxygen tanks to draw fresh air on the job. In return, they get to retire at 45.

In the meantime, weekend escapes to the countryside are futile: Concentrations of sulfur dioxide in the air is so high that vegetation in an almost 30 kilometer radius is dead. Dead, too, is the Russian birthright of mushroom picking: Norilsk’s residents are forbidden to do it because toxicity levels in the edible fungus are too high.

In May 2014, Norilsk Nickel signed a targeted investment program to hasten the closure of its aged nickel production facilities that are deemed beyond modernization.

The agreement was signed among the industrial giant and Russia’s Ministry of Economic Development, the Ministry of Industry, the Ministry of Natural Resources, the administration of the Krasnoyarsk region where Norilsk Nickel is located, and the administration of its host town Norilsk.

Under this agreement, Norilsk Nickel is supposed to be rapidly implementing a project aimed at improving its environmental performance and modernizing production by 2016 instead of 2018. This is contingent on a government agreement to abolish export duties on unalloyed nickel, copper cathodes and sections of cathodes, being made effective as of last year instead of 2016.

The company guaranteed that the entire financial effect of nullifying export duties early would accelerate the closure of derelict nickel production units in Norilsk and help the company address related environmental and social projects.

It was assumed that halting the nickel factory’s production would cease emissions of sulfur dioxide, nickel oxide, copper oxide, lead and a number of inorganic compounds.

However, according to Gizatulin, Russia’s Federal Service for Natural Resource Usage Oversight – known as Rosprirondador – discovered a number of significant violations of Russian environmental law during inspections of Norilsk Nickel’s operations, as well as a lack of efforts to reduce their negative effects on the environment.

Specifically, Rosprirodnador reported higher than acceptable emissions by the Norilsk facilities of sulfur dioxide ­–the chief component of harmful emissions observed at the company’s daugher facilities in the Murmansk Region.

According a posting on the Ministry of Natural Resources website (in Russian), Norilsk’s nickel factories exceeded emissions norms by 44 times. Its copper plant was pushing out emissions at 14 times the legal limit. And its Nadezhda smelting plant, emitted 8 times above regulations.

The site also said the ministry observed discharges of toxic waste substances into water bodies by the company’s Zapolyarny facility.

These facts where brought to the attention of Norilsk Nickel’s management with the demand that it undertake to reduce industrial activities that harm the environment.

A recommendation was made to Norilsk Nickel to send the Ministry of Natural Resources a scheduled plan to create an inventory of the company’s emissions sources, and to develop and approve new standards for maximum permissible emissions due to changes in technology by February 6.

The nickel factory at Norilsk has operated since 1942 and produces 120,000 tons of nickel annually. Last year, the company closed it in accord with its modernization plan, a loss that’s expected to be compensated by the renovated Nadezhda smelting works.

The environmental problems at Norilsk stretch back over decades, but in the last 10 years when current NN management came to power it did not get much better. Back in 2004 M. Prokhorov claimed that NN will be able to resolve most of ecological problems in the area within 5–6 years. By 2008 this timeline moved to 2011 or 2015.Though NN claims to be socially responsible business and invests into modernization.

Norilsk Nickel has worked consistently to reduce emissions of major air pollutants. In 2006, the company reported investment of more than US $5m to maintain and overhaul its dust and gas recovery and removal systems. It asserts a commitment of nearly US $1.4m for its air pollution prevention plan. However, official statistics state that emissions remain extremely high. In 2006, international non-for-profit organization Blacksmith Institute entitled Norilsk the name of the City of Horror.

Norilsk is one of the most polluted places on the Earth. NN wrote a protest letter but state of affairs was left unchanged. Local environmental experts report that although there have been some reductions in pollution levels, levels of SO₂, HS, phenol, formaldehyde, and dust had increased; levels of nickel and copper had increased by 50%. Morbidity rates are stable and death rates are decreasing.

In September Rosprirodnadzor stated that NN significantly exceeds allowed concentrations of polluters in open water reservoirs (river Shuchya, river Novaya Nalednaya and others) located near industrial enterprises of NN objects. Also the agency stated very serious violations of temporary norms for certain polluting substances.

Nevertheless, there were no measures taken against NN. In the end of December the company issued a press release on cooperation with Federal Environmental, Industrial and Nuclear Supervision Service of Russia (Rostekhnadzor) and Norilsk Nickel signed a protocol of cooperation with regard to industrial safety and environment protection in the development of the Company’s operations.

EFFECT OF THE POLLUTION TO THE ENVIRONMENT

The world's biggest nickel producer has admitted a spillage at one of its plants was responsible for a river in the Russian Arctic turning blood-red. In my perspective, the changes in colours indicate that water is not good. There is a toxic in it. It can make the fish or the other living life inside the river dead. This pollution kills the living life inside the river, and maybe the animal that drink from the river water is contaminated with the toxic also. However, the company says there is no danger to people or wildlife. But the other party said that the company was too fast when giving a statement that the pollution inside the river is not danger.

Norilsk Nickel says that heavy rains on 5 September caused a "filtration dam" at its Nadezhda plant to overflow into the Daldykan river. The company had flatly denied it was responsible when images of the red river near Norilsk emerged last week. They doesn’t feels guilty with the situation, so that they don’t want to take a responsibility. Environment Ministry officials had suggested last week that a leak of chemical pollutants from a pipe at the industrial site could have discoloured the river.

Norilsk Nickel denied any such claim, however, even posting pictures allegedly showing the river with a "natural tone" on 7 September. This condition show us how the company is not responsible. The company’s response make the citizen feel disappoint. Furthermore the indigenous groups have accused the company of lax safety standards.

POLLUTION EFFECT TO ECONOMIC GROWTH

This pollution was affected the economic growth of Norilsk. Because of the pollution, the health of the people was become worst. Many of them have a short ages expectancy. How can a economic growth goes up if the amount of dead/sick people larger than the amount of health people. The unhealthy people will not work as productive as healthy people. When the productivity was decrease, it means the economic doesn’t growth right. And also when the number of deaths larger than the number of births, it will cause an error in economic growth. the number of death become larger than birth because of the contamination of the pollution.

The toxic make the people become unhealthy. For the alive people, they also have a short age expectancy because of the pollution. The number of birth is less than the deaths, because many woman is become unhealthy. To be pregnant, a woman must have a good body condition, their body must health. But in this case, many woman has a unhealthy body because of the pollution. And when the woman become a pregnant mother, the risk is become larger. There is a possibility that their baby is not health. If their baby has a congenital defects, it make the live possibility for the baby is become short, and maybe end with the deaths. That is the frame how evil the pollution to the human.

Furthermore, the region has a very extreme poverty. The average annual salary in the region is $10,800. Most people cannot afford to move even if they want to. So the condition of financial force them to live at that region, because they don’t have enough money to move to the safe place. This realty show us that the economic growth in this region become more worst because of the pollution. They cannot go to the doctor to make sure that they are health, because they don’t have money. This condition is like have no ends. It will be like that until the government really-really pay their attention to this region and also the people who live there. Id the government do a recovery, there is a possibility for the economic growth to goes up.     

CONCLUSION

The company that produce hazardous waste must have a good management in process the waste. The company have to make sure that the waste is not dangerous before they throw it away. If the company release a dangerous waste, it can caused a pollution. The worst possibility of pollution is, it might kills many people because there is a toxic contamination. So when doing a business, the company should think about the ethics, not just the profit. Because the profit can be more meaningful if all the people around (inside and out) the company is safe. But then if the company is not accordance with the safety standards, it will make the company incur losses. The effect of the un safety standards will very costly for the company. Because they have to pay the losses, and responsible to the injured party.

BIBLIOGRAPHY

http://www.worstpolluted.org/projects_reports/display/43

https://en.wikipedia.org/wiki/Norilsk

http://bellona.org/news/industrial-pollution/2015-01-russian-ministry-demands-environmental-upgrades-worlds-biggest-nickel-company

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