Hungary’s red sludge: a product of capitalist restructuring
By
Heather Cottin
Published Oct 15, 2010 10:17 PM
Hungary has arrested Zoltan Bakonyi, managing director of MAL Aluminium, the
privately owned company responsible for the country’s worst environmental
disaster. Bakonyi is son of the company’s owner, Arlep Bakonyi, “a
businessman who played a central role in the privatization of the
country’s aluminum industry and is the largest shareholder of the
company.” (New York Times, Oct. 11)
As of Oct. 11, 4,000 people were desperately working to reinforce the reservoir
dam owned by MAL that had partially burst a week earlier.
Some 200 million gallons of toxic red sludge created by MAL’s aluminum
processing plant in Ajka, Hungary, had flooded out of the reservoir,
devastating the villages of Devecser, Somlovasarhely and Kolontar. Eight people
died in the flood’s wake and hundreds were hospitalized with alkali
burns.
The toxic flood killed all plant and animal life along the beautiful Marcal
River. As the sludge flooded the water systems that feed into Europe’s
second-longest river, the Danube, the aluminum company denied responsibility.
It said the incident was a “natural catastrophe” and insisted on
its website that, according to European Union safety standards, the sludge is
not considered toxic. (BBC, Oct. 8)
The plant’s owners are Hungarian and own plants in Slovenia and Bosnia,
as well — perks for them after a U.S. war destroyed the socialist
republic of Yugoslavia and broke it up into competing mini-states.
According to the BBC report, when Hungary put its state assets on the sales
block in 1995, three of the country’s richest men bought the aluminum
plant in Ajka.
Capitalist structural adjustment
Even before the toxic sludge inundated Central Hungary, Hungarians were
suffering.
The World Bank called Hungary’s privatization process the most
comprehensive of any East-Central European country. The World Bank was deeply
involved in restructuring the Hungarian economy.
Prices for Hungarian products fell 65 percent, killing family farms. The World
Bank’s structural adjustment loans were conditioned on the elimination of
low-cost housing loans. Residential subsidies also fell 80 percent, causing a
housing crisis of huge proportions for the poor. Family subsidies, which
included educational, social and medical support, fell 50 percent. Education,
public health and government support for families became victims of repeated
cuts.
The Hungarian government’s embrace of neoliberal economic reforms meant
that the new owners could offer low wages, no limits on overtime, six- or
seven-day workweeks, three-month contracts and low safety standards. An
Employment Code instituted in 1992 weakened the rights of labor unions and
safety standards. Most privatized firms have been unwilling to adhere to safety
regulations or to adequately invest in plant improvements.
Meanwhile, automation and the loss of the Soviet market led to a 30-percent
reduction in the country’s workforce. This forced wages down by 15
percent in the decade after 1990.
The CIA World Factbook admits that capitalist Hungary currently has an official
unemployment rate of 10.8 percent, up 40 percent from 2009. In addition to the
social and economic destabilization resulting from the destruction of socialist
planning, wages have plummeted for the majority of workers.
A Law on Economic Partnership rewarded the directors of publicly owned
companies with the productive assets of those companies, so the privatization
process “managed to transfer public assets into the hands of a few,
influential individuals.” (www.saprin.org) MAL Aluminium’s owners
got very rich.
Red mud, environmental anarchy
A European Commission spokesman said the red sludge was regulated under
European Union law but was not necessarily considered a hazardous waste. The
factory received a permit from the Hungarian government for handling the sludge
in 2006.
International and national environmental laws are written to assist the
companies that run the world’s mines, farms, factories and processing
plants. The owners of MAL Aluminium claim to have been dealing with the waste
according to law. But the neoliberal adjustments the World Bank forced upon
Hungary, among other countries, were written to make profits, not to protect
people or the environment.
The volume of muck that escaped from the red mud reservoir in Hungary was
almost as large as the oil spewed into the Gulf of Mexico after the recent BP
well rupture. (Associated Press, Oct. 8)
Like the oil spill, there were warnings before the disaster.
“The wall [of the reservoir] did not disintegrate in a minute. This
should have been detected,” Hungarian Prime Minister Viktor Orban told
the BBC. (Oct. 8) A blogger noted that on Google Earth, a website offering
satellite views, the wall of the containment reservoir was visibly cracked in a
photo taken two weeks before the toxic flood. (Observer, Oct. 8)
Disaster management officials expect another huge wave of contaminants to break
free of the damaged reservoir containment wall. Hungary’s environmental
secretary, Zoltan Illes, said, “We don’t know whether it will last
another day or another week.” (Xinhua, Oct. 10)
Illes confirmed that the sludge had a “high content of heavy
metals,” including carcinogens. If the sludge dries out, he said, these
toxins can be blown by the wind and wind up in the human respiratory system.
(BBC, Oct. 8)
Greenpeace found levels of arsenic, mercury and chrome. The arsenic level was
“double what is usually contained in such red sludge.” (BBC, Oct.
8) These heavy metals can cause birth defects. They affect the brain, liver,
kidneys and, if they enter the soil, the entire food chain.
The Hungarian government has dumped tons of plaster into the rivers feeding
into the Danube to neutralize the alkaline levels of the water, but the heavy
metals from the toxic sludge threaten the fish and health of all who live along
the rivers. Hungarians consider the company’s offer of 110,000 euros for
compensation to the villagers an insult to the dead, the injured and those who
had to evacuate their homes. (Observer [Britain], Oct. 8)
Capitalist transformation has brought nothing to Hungarian workers and farmers
but hardship and devastation.
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