Contracting work: who's safeguarding the future?
By Peter Perkins
At the beginning of 1998, the NSW government awarded the contract for maintenance work on the State Rail Authority's Illawarra rail line to giant US multinational Fluor Daniels. This caused the loss of a large number of Rail Services Authority jobs.
Multinationals have snapped up large rail contracts worth hundreds of millions of dollars all over the country in recent years. The records of such companies needs to be examined.
Fluor Daniel, headquartered in the US, has more than 50 offices around the world in engineering, construction, maintenance, medical, chemical, mining, technical services and project management. It employs more than 40,000 people, making it one of the largest construction companies in the world.
The company has at least seven contracts worth more than $1 billion each, including a partnership with BHP in the Escondida copper mine in Chile, maintenance contracts for power stations in the Latrobe Valley, nuclear waste "remediation" in the USA and environmentally disastrous mining projects in Indonesia.
Union relations
Fluor's credo commits it to "replacing government work with commercial sector projects". It describes itself as a "procurement" specialist, often having the ear of governments (as its publicity blurb says, "Stay close to your clients").
In 1996 the Sydney Morning Herald revealed that Fluor Daniel was one of several large corporations paying into a slush fund set up for Australian Workers Union officials. Fraud squad detectives from Victoria were trying to trace $30,000 paid by Thiess, part of Leighton Holdings, builders of the $700 million Sydney Harbour casino.
Ian Cambridge, one of the secretaries of the AWU, said, "Recent evidence suggests that a variety of bank accounts operated under various names linked to the AWU have in fact operated secretly and for improper purposes so as to channel money into private slush funds".
Between 1992 and 1995, $370,000 flowed into the fund. The money disappeared once it was placed in union hands, much of it drawn in 40 or so cheques ranging from $4000 to $50,000.
Some of the money was traced to a property bought by an AWU official.
It is known that Fluor Daniel's payments into the fund exceeded $29,000 because this was one of the cheques returned to Fluor once the cat was out of the bag and the money became "tainted".
At the time, there were calls for the Keating government to convene a royal commission. None was forthcoming.
The Liberals never pursued the case either: it would have embarrassed their capitalist colleagues and exposed the raw edges of a debauched system.
Cleaning up
In October 1996 Fluor Daniel was awarded a $5 billion five-year contract to clean up the Hanford nuclear weapons production facility in Washington state for the Department of Energy (DOE). At the time the Cincinnati Enquirer accused Fluor Daniel of financial cheating and having a poor safety record at another site, the DOE's nuclear weapon site at Fernald, Ohio.
The Enquirer wrote: "Fluor Daniel has a poor safety management record at Fernald despite being paid a $2.2 billion fee. Incidents include seven instances of drums of radioactive wastes being stored too close together, mislabelled drums and instances of workers not wearing proper protective clothing. Also one barrel containing 167 pounds of slightly enriched uranium was missing in the complex for two months in 1994."
It was also accused of juggling figures, cost estimates and overruns in an attempt to milk the DOE of bonuses and further funding.
The Enquirer reported that 1000 "serious incidents" had been recorded. "Fernald is a 1.6 square mile site ... The wastes are in six giant pits and three huge above ground silos. By contrast Hanford is 560 square miles. It has nine defunct reactors, 177 underground tanks holding 56 million gallons of radioactive wastes, and 1,500 waste streams."
It took over a year for any real work to begin, yet Fluor Daniel had claimed millions of dollars in clean-up fees.
Fluor was audited by the Defense Contract Auditing Agency after being accused of overcharging the government $54 million in subcontract and administrative costs.
Simultaneously the government had "penalised Fluor Daniel Fernald just US$26.3 million for failure to meet project deadlines; safety violations; sloppy records management and other violations of federal rules and its contract".
Overall, Fluor was fined $34 million for worker injuries, poor job performance and bad bookkeeping at Fernald.
An engineer at the Fernald site, William Watt, resigned as a project control engineer in January 1995, stating that he "could no longer be associated with a company that practised fraud and wrongdoing 'on a regular basis'".
He alleged that Fluor Daniel charged taxpayers $92 million fraudulently in its clean-up of the Fernald site. Under US whistleblower legislation which rewards those who expose corporate misdeeds, he received $8.4 million as a settlement from Fluor Daniel.
The General Accounting Office also criticised Fluor Daniel's clean-up at Fernald, saying its weaknesses in carrying out its responsibilities mean "costs have increased, schedules have slipped and safety and health risks exist".
Accidents and close calls
Environmentalists say that Fluor got the contract at Hanford at least partly because of connections to the Clinton administration. Fluor Daniel has made six-figure contributions to the Democratic National Committee.
Fluor was to supervise efforts to clean up the hazardous wastes and radioactive materials left from nuclear weapons construction. Hanford is said to be the most contaminated site in the US. The clean-up is expected to take 100 years and cost taxpayers tens of billion of dollars.
One of Fluor Daniel's tasks at Hanford was a complete "reorganisation" of the work force. This led to the sacking of close to 6000 employees.
According to Government Accountability Project (GAP), which represents a number of whistleblowers, "The history of Hanford's tank farm is fraught with accidents, incidents and close calls. The radioactive mixtures inside the tanks are so concentrated that some tanks were characterised as 'self boiling'."
There have been occasions when temperatures in tanks fluctuated wildly. Tanks have bulged and ruptured; many are leaking. On several occasions, nearby cities have been ready to be evacuated.
"Of the 177 underground tanks, 68 are acknowledged to have failed so far, and are leaking radioactive and chemically toxic solutions." There is evidence that contaminated ground water is already reaching the nearby Columbia River.
Staff who conscientiously complained about safety procedures and where the project was headed were sacked. In August 1997 seven pipefitters sought whistleblower protection against harassment and discrimination because they disclosed serious safety and health violations at Hanford.
They were sacked, according to GAP's Tom Carpenter, because of their:
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- refusal to install underrated valves in pipes which were destined to carry high-level nuclear waste liquids from the tanks.
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- concerns about working in an area where another crew was performing radiological testing of materials without posting warning signs or marking off a boundary of the area as required.
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- concerns about working in 'confined space' areas, which are enclosed areas where air supply is limited, and workers are susceptible to gases that can displace oxygen, leading rapidly to blackouts and suffocation."
"In addition, when workers attempted to call Safety Department officials by cell phone, they discovered that those officials had turned off their phones 'so as not to be distracted'."
The workers were particularly worried about the substandard valves, because their failure could result in their deaths. The pipefitters refused to fit the underrated valves, causing management eventually to allow the correct valves to be fitted.
However, a week later they were all unemployed. A hearing by the US Department of Labor determined that the pipefitters were illegally terminated and awarded them $10,000 compensation each.
The Department of Labor had also ruled in favour of a Hanford geologist who was terminated after raising concerns about contaminated ground water. This decision is being appealed by Hanford management.
Tom Carpenter says, "This is a non-union company that isn't used to listening to workers and isn't comfortable with even the slightest criticism. Where workers speak up, they're simply fired."
In February Fluor Daniel lost $2 million in performance fees when the DOE accused it of submitting a "poorly prepared health and safety plan". Fluor Daniel was also accused by the DOE of not carrying out its contractual obligations.
Explosion
Earlier, on May 14, 1997, a chemical explosion occurred in one of the 400-gallon tanks in the Plutonium Processing Facility, releasing plutonium and hazardous chemicals. Nearby residents and traffic on a nearby highway were never notified.
The blast punched a hole in the roof of the facility and broke a fire sprinkler line; spilling water washed bits of plutonium down hallways.
The explosion occurred less than 20 metres from a silo holding 10 tons of plutonium. If the blast had breached the silo, the US would have had a catastrophe of Chernobyl proportions.
"Some traces of plutonium found outside three doors of the building may been deposited there from earlier incidents", officials said.
Workers exposed to the toxic plume had to drive themselves to the hospital four hours after the event and were not radiologically tested till two months later. DOE and Fluor Daniel admitted that there were flaws in the emergency plan at "every link" in the response chain.
It took two hours and seven minutes to declare an emergency and another hour and 16 minutes to notify government agencies and emergency crews of the incident.
Fluor Daniel has been criticised for not making regular monthly inspections of the tanks from October 1996, when it took charge at Hanford, till May 1997, when the accident happened.
After the accident, the DOE held its own in-house investigation. Community activist groups claim, "Even potential criminal violations of environmental and occupational laws are not being investigated".
Strange as it may seem, Fluor received a $54 million performance bonus for its first year at Hanford, despite the DOE's knowledge that Fluor submitted bills to DOE for two lobbyists intent on breaking down US environmental laws.
Activists in the Hanford area are concerned that there are now attempts to restart the nuclear weapons facility under the guise that medical isotopes will be produced there.
William Stokes, a DOE ex-official and Richard Thompson, a former Air Force officer cum real estate developer, are seeking to restart the plant.
Thompson was accused in 1996 by one of his former engineers of illegally dealing with a European nuclear giant in an attempt to import 300 German nuclear fuel assemblies in exchange for $35.8 million. His trial resulted in a hung jury.
Fluor has prepared the way for further tritium (used in nuclear weapons) production by diverting clean-up money.
Geov Parrish and Maria Tomchick, two activists in the area, bring some rationality to the issues when they write in an article posted on the internet, "In this environment, and against an ongoing history of public cover-ups, lies and deceit, it's sheer insanity to propose that Hanford begin producing tritium again. This whole history of Hanford is a terrifying example of private enterprise run amok with the help of government complicity."
Dumping in the ocean
Away from its home base in the US, Fluor has also acted with impunity. Gerry van Klinken, in Inside Indonesia magazine, writes that Fluor landed the $1.6 billion contract for construction of the huge gold and copper mine at Batu Hijau in Sumbawa, Indonesia.
The mine is owned by US mining giant Newmont (45%), Sumitomo Corp (35%) and private Indonesian company Pukuafu Indah (20%).
According to Van Klinken, when the mine starts production in 2000, it will measure up against the destruction caused by the massive Freeport mine. "In all, 2.6 billion tons of material will be removed from the 500 m hills that make up the Batu Hijau deposit in West Sumbawa. After 20 years there will be a crater 2.2 km across, with its floor 300 metres below sea level."
Tailings will be produced at the rate of up to 160,000 tons per day. Fluor Daniel plans to get rid of this mess by building a pipeline 13 km to the beach, thence extending it 3.2 km out into the Indian Ocean, despite the fact that there are international conventions about dumping wastes at sea.
This cheap waste disposal method makes the mine viable. In the west, the disposal of tailings from such low grade ore would make the project uneconomic.
Privatisation of public utilities, with the resultant deregulation of awards and weakening of health and safety legislation and practice, will place workers in a far weaker position. This is all the more the case when the corporation concerned is one with the power and the record of a Fluor Daniel.