VZCZCXRO1898
PP RUEHGR
DE RUEHSP #0021/01 0081213
ZNR UUUUU ZZH
P 081213Z JAN 07
FM AMEMBASSY PORT OF SPAIN
TO RUEHC/SECSTATE WASHDC PRIORITY 7749
INFO RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEHCV/AMEMBASSY CARACAS 3632
RUEHBJ/AMEMBASSY BEIJING 0143
RUEHSJ/AMEMBASSY SAN JOSE 0469
RUCNCOM/EC CARICOM COLLECTIVE

UNCLAS SECTION 01 OF 03 PORT OF SPAIN 000021 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
SAN JOSE FOR REGIONAL ENVIRONMENTAL HUB 
 
E.O. 12958: N/A 
TAGS: EINV EMIN SENV TD
SUBJECT: SETBACK FOR ALCOA SMELTER IN TRINIDAD 
 
REF: A) POS 847; B) 05 POS 2064 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY 
 
¶1. (SBU) SUMMARY:  After months of controversy about plans to 
construct aluminum smelters in Trinidad and a day-long national 
symposium to discuss the development of a national aluminum 
industry, Prime Minister Manning announced Christmas Eve that the 
GOTT was discontinuing plans for the industrial estate where Alcoa's 
proposed US$1.5 billion aluminum smelter was to be located. 
Instead, the GOTT would accelerate construction of an offshore 
industrial estate, to include aluminum smelters and downstream 
industry.  While this move could be viewed as a response to public 
pressure, other statements and actions by government ministers have 
only reinforced a perception of GOTT indifference to public opinion 
and a lack of transparency in decision making on major projects. 
The vehemence of public debate over aluminum may also foreshadow 
increased opposition to future industrial projects in T&T.  In the 
wake of these events, the fate of Alcoa's proposed investment in 
Trinidad appears less certain, while prospects for the smaller 
Alutrint smelter, a GOTT joint venture involving a Venezuelan 
partner and Chinese construction, appear secure.  END SUMMARY. 
 
¶2. (U) Proposals to construct two aluminum smelters in Trinidad's 
southwestern peninsula (see reftels) have generated increasing 
public debate in recent months.  While Prime Minister Patrick 
Manning and Energy Minister Lenny Saith as well as previous 
governments have consistently promoted the idea of aluminum as a way 
to use Trinidad and Tobago's natural gas to stimulate downstream 
manufacturing, opposition politicians and environmental activists 
have directed intense criticism at Alcoa's plan to construct a 
341,000 metric ton per year facility at a cost of US$1.5 billion in 
the sparsely populated rural village of Chatham, an opposition UNC 
party stronghold.  A smaller facility to be operated by Alutrint, a 
60/40 joint venture between the GOTT and the Venezuelan firm Sural, 
with participation from the China National Machinery and Equipment 
Import Corporation, and constructed in the traditionally industrial 
village of La Brea, a ruling PNM party district, has by comparison 
all but escaped criticism. 
 
------------------------------- 
Goodbye Chatham, Hello Otaheite 
------------------------------- 
¶3. (U) In his yearly Christmas Day message, Prime Minister Manning 
announced that while the smelter symposium held two weeks earlier 
had provided support for the government position that aluminum 
smelters would present no unmanageable environmental risks, plans 
for an industrial estate at Chatham village have been abandoned. 
Instead, GOTT would "accelerate development of a new industrial 
estate offshore Otaheite Bank" that could include aluminum smelters 
and other aluminum-based industry.  Several days later Energy 
Minister Lenny Saith backtracked on whether the planned Otaheite 
estate would include aluminum, saying that it was only one of 
several possible alternative sites for Alcoa's proposed smelter. 
Alcoa representatives expressed disappointment with the decision to 
abandon the Chatham site, as new feasibility and environmental 
studies would need to be conducted, but have not officially 
commented on their plans.  Moreover, the plan for an Otaheite 
estate, which calls for the construction of a 4000-acre island on 
reclaimed land in the Gulf of Paria, connected to shore by a 
causeway, would impose a significant delay on Alcoa and is not 
guaranteed to be controversy-free, as local fisherman have already 
initiated protests against the construction. 
 
--------------------- 
The Smelter Symposium 
--------------------- 
 
¶4. (U) Prime Minister Manning's announcement on the site change came 
at the end of an eventful month of smelter-related events.  On 
Wednesday, December 6, the South Trinidad Chamber of Industry and 
Commerce, in conjunction with the National Energy Corporation (NEC), 
the University of the West Indies (UWI) and the University of 
Trinidad and Tobago (UTT) hosted a one-day "Symposium on the 
Aluminum Industry in Trinidad and Tobago" in response to growing 
public debate about the construction of up to three (and in some 
reports four) aluminum smelters in Trinidad.  The South Chamber 
invited 350 selected stakeholders, "inclusive of the broadest range 
of views" to attend the symposium, and TV and radio stations 
provided full live coverage of the event. 
 
¶5. (U) Most commentators credited the South Chamber for organizing a 
fair and balanced meeting.  Several international technical experts 
presented information meant to reassure the public that 
technological measures exist to address any environmental and health 
 
PORT OF SP 00000021  002 OF 003 
 
 
concerns.  Meanwhile, local professors offered cautious views, 
questioning whether aluminum was the best economic use of T&T's 
natural gas resources; proposing alternative industries in the area, 
such as eco-tourism or raising buffalypso (Trinidadian water 
buffalo); and emphasizing the need to ensure community development 
if a smelter is constructed. 
 
-------------------------- 
"Let the bacchanal begin!" 
-------------------------- 
 
¶6. (U) When the live audience grew restless with the string of 
technical experts in the afternoon session and called for an 
opportunity to air their views, the symposium organizers cancelled 
the final presentation, a planned videoconference with USEPA experts 
on air quality standards, and opened the floor for comment.  Upon 
hearing this, panelist and UWI Professor Dennis Pantin said "Yes! No 
more technology, let the bacchanal begin!" - apparently giving voice 
to the feelings of many of the audience members. 
 
¶7. (U) Smelter opponents in the audience proceeded to dominate the 
last two hours of the symposium.  As in much of the debate prior to 
the symposium, while some opposed aluminum smelters in general, 
opposition to the planned Alcoa smelter in Chatham was far more 
vocal.  Some audience members voiced cynicism towards the assurances 
of the technical experts, pooh-poohing studies that have shown that 
health hazards can be managed with modern technology.  Many also 
doubted the EMA's capacity to conduct an adequate Environmental 
Impact Assessment (EIA) prior to smelter construction or monitor 
emissions in accordance with international standards during smelter 
operations. 
 
------------------------- 
Real Government Outreach? 
------------------------- 
 
¶8. (U) While pre-symposium fears that only government "propaganda" 
would be heard at the symposium were alleviated, questions remain 
about what the government intended to achieve by holding the 
symposium.  Prime Minister Manning's government has drawn criticism 
for its lack of public outreach and consultation and the perception 
of government disregard for public opinion on this issue.  In a 
speech to local business owners on the day before the symposium, 
Prime Minister Manning appeared to validate perceptions of 
high-handedness when he stated that the symposium was held only to 
provide the public with "all the facts" and denied that it was meant 
to serve as a public consultation.  He did not say that the smelters 
were a "done deal" as some critics claimed, but he did express 
confidence in the "rectitude of our cause" and asserted that so far 
no questions had been raised that the government had not considered 
before opting to establish an aluminum industry. 
 
¶9. (U) Media commentary also has criticized Prime Minister Manning 
for a lack of transparency in the GOTT's negotiations with Alcoa. 
Many have called for disclosure of the price negotiated for the 
natural gas that Trinidad will provide to power the Alcoa smelter, 
in order to permit a transparent cost-benefit analysis of whether 
aluminum smelters are an optimal use for T&T's gas reserves. 
However, the Prime Minister has maintained that rules of commercial 
confidentiality apply in this situation.  Furthermore, the Prime 
 
SIPDIS 
Minister's decision to cancel the planned industrial estate at 
Chatham also has provoked intense speculation, as his Christmas Eve 
speech to the nation provided no clear reasoning behind the 
decision. 
 
------------------------------- 
Will There Be An Alcoa Smelter? 
------------------------------- 
 
¶10.  In recent remarks to the press, Alcoa's Wade Hughes, Director 
of Public Strategy, stated that the smelter project may not proceed 
if the "commercial arrangements" cannot be negotiated, i.e. the 
price of the natural gas, in current negotiations between Alcoa and 
GOTT on a new Memorandum of Intent.  Responding to recent statements 
by Prime Minister Manning that the environmental issue was not open 
for negotiation, Hughes added that Alcoa knows how to build and 
safely operate its facilities, so meeting environmental standards 
has never been an issue. 
 
¶11. (SBU) COMMENT: Government officials have stated in the aftermath 
of the symposium that they still intend to develop an aluminum 
industry in Trinidad.  Whether Alcoa will be part of this industry 
is less clear.  Recent comments by Alcoa and the government and the 
government's abandonment of the Chatham industrial estate raise the 
prospect that commercial negotiations could fail, prompting Alcoa to 
 
PORT OF SP 00000021  003 OF 003 
 
 
withdraw its proposal.  The Alutrint smelter project, which is 60 
percent GOTT and 40 percent Venezuelan owned and will use Chinese 
technology, has not faced similar scrutiny or public protest and 
looks likely to proceed as planned. 
 
¶12. (SBU) COMMENT CONT'.:  The public protests that accompanied 
Alcoa's smelter proposal have no precedent in Trinidad's long 
history of industrial development, as many academics during and 
after the symposium have pointed out.  Taking inspiration from 
foreign environmentalists' protests against another Alcoa project in 
Iceland, a small but vocal group of domestic activists succeeded in 
dominating media coverage and reversing GOTT policy. While the 
symposium appears to have dampened some of the concern raised about 
environmental and health impacts, the fundamental policy question - 
how best to use T&T's hydrocarbon reserves - continues to resonate. 
There are also growing calls for a national sustainable development 
framework, especially in reference to "mega-projects," and greater 
public involvement in determining the path of Trinidad's 
development.  While the GOTT remains committed to capital-intensive 
projects, including petrochemicals, steel, and plastics, that would 
use T&T's energy resources to establish a foundation for downstream 
manufacturing, the smelter debate may represent only the start of a 
more contentious road for the current government, which faces 
elections before the end of the upcoming year, and Trinidad's future 
onshore industrial development.  END COMMENT. 
 
 
 
 
 
AUSTIN