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In an unexpected move, the state Water Quality Appeals Board has delayed deciding whether the Phelps Dodge Corporation can build Verde Valley Ranch, a housing development surrounding a golf course that would be built on several acres of toxic mine tailings. The tailings are now contaminating groundwater seeping into the Verde River.
In calling for the delay, the chairman of the appeals board criticized Phelps Dodge in surprisingly strong terms, saying the multinational mining giant had a "long, replete and unbroken record of environmental insensitivity."
Comprised of three gubernatorial appointees, the appeals board met late last month to decide whether two groundwater-protection permits necessary for construction of Verde Valley Ranch were issued legally. The proposed project sits in Clarkdale, below the Tuzigoot National Monument, a famous Sinagua Indian ruin.
In February, the Sierra Club and other environmental groups appealed the permits, issued by the state Department of Environmental Quality to Phelps Dodge and to the Town of Clarkdale.
The Water Quality Appeals Board decides such appeals.
Last April, administrative law judge Harold Merkow concluded that the two aquifer-protection permits were, in fact, legal.
Lawyers on both sides of the dispute say they expected the Water Quality Appeals Board to accept Merkow's recommendations, because state boards almost always follow the rulings of administrative judges. (Should the board ultimately decide in Phelps Dodge's favor, the environmentalists say they will appeal the board's decision to Maricopa County Superior Court.)
But the tiny state board, which has heard only one other groundwater-permit appeal in the last two years, surprised all participants in the case, asking for submission of additional facts and legal briefs from both sides and continuing the hearing to July 12.
Under the Phelps Dodge plan, a plastic liner would be laid over a four-million-ton pile of mine tailings laced with health-threatening heavy metals; the golf course would be built atop soil laid over the liner. The course would be watered by effluent from the town of Clarkdale, and special drains would remove leftover effluent from the greens. A system of electric pumps would suck up the first layer of already-contaminated groundwater beneath the tailings, preventing further seepage into the Verde River.
The case is significant because Arizona is the largest copper-producing state in the nation. If Phelps Dodge wins court challenges and administrative appeals, Verde Valley Ranch may set a precedent for dealing with hundreds of tons of potentially health-threatening tailings cast about the state.
When DEQ granted the permits last year, it contended that the complicated system of environmental checks and balances proposed by Phelps Dodge would ensure that neither the nearby Verde River nor underground drinking-water reserves would be contaminated by health-threatening heavy metals in the to-be-buried tailings.
At a lengthy hearing last February before Merkow, the environmental groups asserted, among other things, that the permits were issued illegally because the state failed to require Phelps Dodge to sufficiently study the groundwater and geology of the area in question; because the government failed to force the multinational copper company to reveal how it has complied with environmental laws elsewhere in the state, the country and the world; and because DEQ failed to issue the permit to the proper corporation. (Phelps Dodge Development Corporation, a subsidiary of Phelps Dodge, applied for one of the permits, but the permit was issued instead to the parent corporation, raising questions about who is responsible for environmental cleanup costs.)
Phelps Dodge accused the environmentalists of trying to kill the project entirely.
The environmentalists said they simply wanted a more stringent permit.
In a written recommendation, Merkow upheld the state and Phelps Dodge, saying, among other things, that the area had been thoroughly studied and that the checks and balances were, indeed, environmentally sound.
"The tailings pile will stand as a barren, inert leviathan of environmental ignominy, bedecked and protected by recreational radiance," wrote Merkow. "The plan presented by the applicants must therefore be seen as both reasonable and adequate to foster the goals of the Aquifer Protection Permit program."
"The goal of the Aquifer Protection Permits is not to flog past indiscretions of Phelps Dodge," Merkow wrote.
". . . Phelps Dodge cannot be excluded from consideration of the grant of a permit merely because it is a target in other environmental enforcement actions."
At its May meeting, the Water Quality Appeals Board wasn't sure it agreed with Merkow.
And the board's chairman, Phoenix lawyer A. Paul Blunt, lived up to his name, directly challenging both Merkow and Phelps Dodge.
"With respect to Mr. Merkow," Blunt said, "it is obvious that he was not born and raised in a Phelps Dodge town. I was. I've had a lifetime of personal experience to attest to this company's long, replete and unbroken record of environmental insensitivity. They have absolutely no regard for the environment at all as far as I'm concerned; they never have. And unless the laws compel them to have adherence to environmental standards they never will.
"I don't need to see evidence in the record to know what I see . . . with my own two eyes. I can point you all over the state of Arizona, including my hometown of Bisbee, to the copper water ditch where I played as a child to the smelter in Douglas that was in noncompliance with EPA standards and was kept open despite lawsuits and every attempt to close it, until they finally couldn't do it [smelt ore] . . . on and on.
". . . Phelps Dodge comes to this particular board member bearing the sins of the past."
Phelps Dodge, through its lawyer, Bob Boatman, refused New Times' requests for comment last week.
Blunt also expressed concern that one permit "began with one applicant and switched to another." And he asked DEQ's lawyer why the state did not require Phelps Dodge to disclose its past environmental compliance record. "Wouldn't it be good for DEQ to know if Phelps Dodge has ten permits and nine are not in compliance--and I'm not suggesting that this is true--but wouldn't that be important for the public?" he asked assistant attorney general Yvonne Hunter.
"There are various levels of violation," she answered.
"People can be in technical violation all the time. But this does not necessarily mean DEQ should be hesitant in issuing a permit to another facility. . . ."
Hunter said the two state permits would allow the state more control over Phelps Dodge, whose tailings are already polluting the river.
Board member Don Pope, a well driller from Yuma, said the technical aspects of the Phelps Dodge plan seemed reasonable. But Pope said he needed more assurance that Phelps Dodge would follow through with its promises to continue "the operation and maintenance of the system."
Jeff Bouma, a Phoenix attorney representing the environmental groups, says he fully expected the board to affirm Merkow's recommendation in the Phelps Dodge case.
But when the board requested more facts and more time, "jaws hit the floor," he says.
"This has never happened before."
Of course, there is the possibility that board members were simply trying to sound tough, and will eventually concur with Merkow's findings. But Bouma doubts that the board members were trying to impress anyone.
"If it's a show, who were they playing to?" he asks.