Background

The small Ontario town of Elmira, population 7,500, is the original site of Naugatuck Chemicals which was established as part of the war effort to produce synthetic rubber. Today the site is the head office and manufacturing plant of Uniroyal Chemical Ltd. - an international supplier of chemicals and chemical products. The Elmira plant is organized by the United Steelworkers of America (USWA) Local 13691 and produces a large selection of specialty chemicals, particularly crop protection chemicals and antioxidants. It employs 250 people together with a further 45 at research facilities in nearby Guelph. The value of its shipments is approximately $150 million per annum of which 40 percent is exported to a large number of different countries through the marketing and distribution system of the parent company. The impact of the facility on the local economy is estimated to be $30 million per year.

Environmental Pressures

Like many other chemical producers, the company has faced a number of environmental issues through the years but its primary concern has related to water quality. The Canagagigue Creek runs through the middle of the Uniroyal property in Elmira and is part of the Grand River system. It was the discovery of traces of N­nitrosodimethylamine (NDMA) in pre-treated wastewater entering the Elmira municipal sewage treatment plant and in treated water leaving that plant that has had a large impact on the company and its workforce and is mainly focused on here. NDMA has been classified by the International Agency for Research on Cancer as probably carcinogenic in humans. The other issues that the company has faced relate to contamination of groundwater and the soil that had been placed in containment pits in the late Sixties. The company has spent $12.5 million on site cleanup from 1990 to 1994, taking a number of steps to remediate all three concerns. This represents approximately half of investment expenditures over this period.

It was later determined the presence of NDMA was due to the occurrence of two substances in the wastewater - dimethylamine and sodium nitrite - which were combining to produce NDMA. Following the detection of NDMA, the company immediately stopped using dimethylamine and removed it from the process tanks. In late December 1989 the Ontario Ministry of Environment issued a direction restricting Uniroyal's access to the Elmira sewage treatment plant. A further Ministry order in February 1990 meant that Uniroyal was not permitted to discharge into the water sewage treatment plant until September 1990. The average discharge of water to the sewage treatment plant was 150,000 gallons per day up until the time of the order.

The effect of the orders on the company was the shutdown of two processes in the plant. The process which used dimethylamine was closed in December 1989 and in March of 1990 the process for producing paraphenylenediamine was closed to eliminate sodium nitrite from wastewater. Both processes involved the direct employment of approximately 40 people each, but the impact in terms of employment was more widely felt. As a result of the various process shutdowns employment fell from 230 to 120 among the unionized employees and from 50 to 40 among the salaried staff. As a result the union membership voiced the need for some formal protection in the collective agreement with respect to reporting any environmental concerns to government and others outside the company.

To compound the difficulties at the plant, both union and the company were preparing for negotiations on a new collective agreement. Although the issue of protection from environmental adjustments was a concern, it was only one of a number of issues facing the negotiators. Negotiations became stalled, primarily over issues of money, and an eight month strike ensued which was finally settled in January 1991. During this time the plant was operated by salaried staff.

Response

The shutdown and the strike represented the nadir for both union and management. From a business point of view much of the equipment remained idle and the company had to solve the environmental concerns surrounding water quality. From the union's perspective the lower workforce and an uncertain future were clearly undesirable.

The response by the company was an attempt to make itself less vulnerable to the type of problems that had occurred with the NDMA episode. In this regard internal environmental guidelines were established: to reduce the use of water from 1.2 million gallons per day to 400,000 gallons per day and to reduce water discharges from 150,000 to 40,000 gallons per day. In order to achieve this, current production processes would need to be modified and new products would be sought out that did not require large amounts of water in production. In essence the crisis prompted the company to reinvent itself and ask some fundamental questions as to what it produced and how it produced it.

The following are some specific examples of changes that were made at the Elmira facility.

• Expansion of production of anti-oxidants for motor oils. The manufacture of these has lower water demands than other chemicals previously manufactured.
• Development of a new process for the production of the anti-oxidants that uses even less water than previous methods.
• A change in the practice of using water for cooling. Multiple uses of water for cooling were achieved rather than to use cooling water only once before discharging it into the river as had been the previous practice. This made more efficient use of water for cooling and also contributed significantly to lower water discharges.
• Changes in simple practices such as cleaning floors by sweeping them rather than hosing them down also reduced the consumption and discharge of water.

Non-environmental capital expenditures were in the region of $4 million per year; many of these changes involved some use of new technology. Taken together with the changing practices at the facility, a strong commitment to training was fostered. Computerization of many parts of the operations and administration also made training necessary. The Chemical Operator Apprenticeship program was developed and instituted at the Elmira plant. This has proven successful and was formally recognized by the Ontario Ministry of Skills Development.

Despite the strike, or maybe because of it, the union and management met regularly to discuss environmental problems, mainly on an informal basis. The crisis on both the union and management side had served to raise the awareness of workers and management on production methods and the environment. Both parties understood the importance of communications to respond to the challenges posed by the shutdowns.

In addition to eliminating both dimethylamine and sodium nitrite from its production processes, the company also supplemented its water pre-treatment process to destroy any NDMA already existing in the wastewater. The advanced oxidation process was responsible for reducing the amount of NDMA from 30 parts per billion to below 0.2 parts per billion.

Other areas of contamination in the groundwater and the soil were also addressed. Advanced oxidation and granular activated carbon processes were used to treat groundwater that was pumped to the surface before being discharged into the Canagagigue Creek. The containment and treatment system was put in place in 1992. The town of Elmira was taken off groundwater and the company paid the cost of a pipeline from St. Jacobs to Elmira.

The contaminated soil had been housed in two large pits under government supervision in 1969-70. It was believed that these pits were leaking and in 1993 the soil was removed and transferred to an above ground storage facility and containment site on the Uniroyal property. In all some 30,000 cu. metres was excavated and stored at a cost of $4.5 million.

In 1994 the company and the Ontario Ministry of Environment and Energy reached an agreement on a plan to prevent any contaminated groundwater from entering Canagagigue Creek using an extraction well containment system. In July 1994 five extraction wells and eight monitoring wells were installed.

Community Involvement

The whole process of removing NDMA as well as the extensive environmental cleanup was monitored by a public advisory committee composed of representatives from the local community, the Grand River Conservation Authority, regional and municipal governments and included two representatives from local environmental groups. Contact with the local community is also an integral component of the Responsible Care program developed by the Canadian Chemical Producers Association. There are regular surveys of local residents on a wide range of environmental matters from noise and traffic congestion to safety concerns and odours. Information packages to inform residents of conditions at the Uniroyal facility (including emissions) are also regularly produced. The Responsible Care program also calls for an emergency response team which has been established to deal with potential catastrophes at the Elmira facility. A 25 man fire brigade is also available at the plant.

Regulation Process

The experience of dealing with the NDMA detection and cleanup raised some important concerns by the company with the government process of environmental regulation. In particular, no standards had been established for the presence of NDMA until the chemical was detected. Elmira was the first instance in which the Ministry of Environment had detected NDMA, which meant there were no comparable situations. Indeed the Ministry order of February 1990 did not set a standard for parts per billion that the company had to meet. The target of 0.5 parts per billion was only established through the appeal process under the environmental legislation in Ontario. In addition, the measuring techniques of the Ministry of Environment were regarded by the company as erratic and unreliable - an opinion also expressed by others outside the company.

Results

The results of the crisis in late 1989 and 1990 on the company and the union were that:

• the company reinvented itself both in terms of what it produced and in terms of how it produced it;
• the company became more competitive and profitable and continues to receive its share of investment dollars from the parent company;
• production volume has increased by 15 percent;
• employment at the facility has become more secure - no layoffs have occurred since the end of the strike in early 1991;
• employment has increased from just under 200 employees in the depth of the crisis to 250;
• equally importantly, the labour relations climate has improved dramatically and the 1992 collective agreement was negotiated ahead of time.

Some of the changes that were incorporated at Uniroyal have also been adopted in other companies. The chemical operator apprenticeship program developed by Uniroyal is now also the model for similar programs in other chemical companies.

Despite the increased production, air emissions were reduced by 22 percent in 1994 and water discharges were down to 20,000 gallons per day from 150,000 gallons in 1989. The workplace environment committee has greatly increased the awareness of such issues at the shop floor. The community advisory committee has also instilled greater communication and trust between local residents, municipalities and the company.

Significance

The case vividly demonstrates the impact that unanticipated changes can have on an operation. The discovery of trace elements of NDMA closed two production processes and led to employment losses. Despite the concerns that Uniroyal had at the time over the process of government regulation, however, the case also shows that at points of crisis both labour and management may seek their common interest in the survival of the facility. In particular the case shows how a company can turn a crisis situation into one that enables a renewal of both the company and its workforce. Both union and management have worked together to ensure that environmental performance is improved through a combination of improved workplace practices, training and capital investment.

Posted with permission of the Canadian Labour and Business Centre.