Foxconn Deal Raises Environmental Questions

by | August 21, 2017

By Lee Bergquist and Don Behm

Foxconn Technology Group's plans for a sprawling manufacturing facility pose an array of environmental challenges, ranging from the way it will handle chemicals to the impact a plant of its size will have on the surrounding watershed.

The company's plans for a $10 billion plant in southeastern Wisconsin would be the first for Foxconn in North America.

The administration of Republican Gov. Scott Walker and other supporters have touted the economic benefits of a plant that could employ up to 13,000 workers in a region that has experienced a loss of manufacturing jobs.

But in Asia, the Taiwan-based company, the world's largest contract manufacturer of consumer electronics, has grappled with pollution problems, particularly in China, where it serves as a contract manufacturer to Apple and other technology companies.

A Wisconsin plant, like its facilities in Asia, would run through massive volumes of water that would have to be cleaned before and after production.

Also, many potentially polluting chemicals are needed to build liquid crystal display panels for TV sets, laptops and wireless telephones.

The fabrication of LCD components typically includes the use of zinc, cadmium, chromium, copper and benzene -- a widely used organic solvent, according to experts.

The Department of Natural Resources says it has not been briefed by the company on potential contaminants.

"There has been no direct contact between Foxconn and the DNR," spokesman Jim Dick said in an email. "The company has not shared information with the DNR on its manufacturing process. We'll know more when the permit applications start coming in."

State officials took a big step Thursday when the Wisconsin Assembly voted to approve a $3 billion economic incentive package, which also included a relaxation of some environmental regulations.

During debate, Democratic lawmakers raised worries about Foxconn's past environmental problems, as well as exemptions from state environmental laws that state officials are promising the company.

The exemptions could mean the destruction of state-regulated wetlands, allowing construction activity in the bed of a stream and changing the course of a stream without obtaining a state permit.

Attorney Sarah Geers of Midwest Environmental Advocates said groups like hers will not be able to measure the potential impact of the exemptions until Foxconn picks a site -- likely in Racine or Kenosha counties.

The DNR has said that other adequate protections are in place, including federal regulations. But Geers said some wetlands, for example, are only protected by state law and their potential loss could impact flooding and habitat in the area.

Last week, Democrats tried -- and failed -- to persuade Republicans to allow the Legislature's powerful Joint Finance Committee time to review the myriad economic and environmental issues before taking a floor vote.

Democrats questioned the DNR's ability to regulate Foxconn by an administration in which environmental enforcement has lagged past administrations. The agency was the subject of a critical state audit in 2016 of its wastewater management program, which reported a drop in enforcement of municipal and industrial permits from 2005 to 2014.

The DNR says it is making progress and is reducing the backlog of inspections of municipal and industrial permits.

"They have a whole history of dumping heavy metals in China's river," Rep. Chris Taylor (D-Madison) said of Foxconn during floor debate. "People of Wisconsin don't want companies that dump pollutants into streams."

Another Democrat, Rep. Dana Wachs of Eau Claire, a candidate for governor, also questioned the practices of Foxconn.

"So maybe we give them $3 billion to come to Wisconsin," he told lawmakers. "What is it going to be the cost to clean up their mess when they leave?"

 

Foxconn has come under criticism from environmental and labor rights groups in Asia for the way it operates.

In 2011, an explosion at a Foxconn plant in Chengdu, China, killed three workers and injured 15 others, according to the New York Times. At the plant, workers had complained of poor ventilation and problems with dust. Local authorities investigating the accident attributed the cause to combustible dust.

Foxconn said in a statement at the time that the accident was "unfortunate," but also said that a labor group was trying to capitalize on the accident.

In 2013, the Wall Street Journal and other publications reported that regulators in China investigated Foxconn and another electronics supplier after allegations its factory near Shanghai was dumping heavy metals into canals that lead to a nearby river.

Foxconn denied the claim and said at the time the company complies with all relevant environmental regulations.

The company said in an email that its corporate code of conduct includes sustainable business practices. "Minimizing the negative impact of our operations on the environment is a fundamental responsibility for Foxconn as a sustainable business ..." Foxconn said.

Financial analyst David Hsieh of IHS Markit research group wrote in a June 10 blog about Foxconn's impending plans to expand into the United States that "toxic byproducts from the manufacturing process, if not handled well, can have a catastrophic effect on the environment."

Hsieh, however, said that Asian LCD makers have learned how to handle waste and recycling issues.

Under pressure from environmental groups, Apple in 2012 agreed to independent environmental reviews of some of its suppliers, including Foxconn.

In Apple's 2016 report on the activities of its suppliers, Apple said Foxconn would be creating 400 megawatts of solar energy by 2018, which is enough electricity to power the final production of its iPhone plant in Zhengzhou, China.

Apple also said that Foxconn's plant in Guanlan, China, in 2015 became the first supplier of 22 factories involved in a waste diversion program to recycle or dispose of all production waste without sending it to a landfill.

The Walker administration says that despite the exemptions for building on wetlands and performing construction work in waterways, Foxconn would be operating under strict environmental regulations.

Federal oversight of wetlands and other waterways would remain in place, Walker officials say.

Also, they say despite exempting the company from an environmental impact statement, the company would be subject to such an analysis from the U.S. Army Corps of Engineers.

In addition, Foxconn would need permits from the DNR for air emissions, hazardous waste and wastewater.

Foxconn has not publicly identified a site. Two potential locations in the Village of Mount Pleasant in Racine County are located within an area bounded by state Highway 11 on the north, County Line Road on the south, I-94 on the west, and county Highway H to the east.

Mount Pleasant's wastewater goes to the Racine sewage treatment plant, and an official there said waste from the company would be closely scrutinized.

Any new industry must provide details on all contaminants in each manufacturing step in the factory, said Nora Erlandson, laboratory director for the Racine Water and Wastewater Utilities.

The company would also have to provide Racine with the daily volume of its wastewater discharges, she said, and comply with limits on heavy metals, chemicals and other pollutants in the wastewater before it is discharged to the municipal system.

Foxconn will either have to ship the waste offsite or build a pre-treatment plant at the factory. The design and engineering of the plant would have to be approved by the DNR.

The utility regularly monitors factories that pre-treat their waste because hazardous pollutants pose health risks to workers at the treatment plant, and could harm the bacteria that digest organic waste during the treatment process.

The fabrication of LCD components involves a process of applying crystals over layer after layer of glass or thin plastic film.

John West, interim director of the Liquid Crystal Institute at Kent State University, said that a plant like the one envisioned by Foxconn would need large volumes of water to clean the surface of each layer.

"The environment in the facility has to be pristine," he said. "It's cleaner than an operating room."

Hsieh, the analyst who tracks the LCD industry, estimates that a plant like Foxconn's would use more than 15 million gallons a day.

Racine's water utility and its wastewater utility have the capacity to supply the company, but Mount Pleasant can't lay claim to all of it.

Public records show that the plant's estimated wastewater demand would exceed the amount Mount Pleasant could provide, under a 2002 agreement with Racine.

The agreement gave Mount Pleasant 10.49 million gallons a day of treatment capacity. It has used an average of 5.24 million gallons of wastewater over the last five years, records show.

If Foxconn picks a site in Mount Pleasant, the village would need to ask Racine for more capacity, under terms of the agreement, at a time when at least one other community is seeking more wastewater treatment.

Earlier this month, Caledonia said it would need additional capacity to meet the needs of development along the I-94 corridor, said Keith Haas, general manager of the Racine Water and Wastewater Utilities.

The 2002 agreement requires Haas to notify Mount Pleasant and Sturtevant in such cases. They can join in the planning process and share the costs of building more capacity to meet their future demand, Haas said.

Designing and constructing additional plant capacity could take four to five years, he said.

(c)2017 the Milwaukee Journal Sentinel