Argentinian President Mauricio Macri sought to bolster trade between his country and the U.S. during a visit to the White House last week. But a long-running dispute over a polluted New Jersey river threatens to overshadow his efforts to inject life into Argentina's struggling economy, Foreign Policy reports.
The Passaic River winds through New Jersey's heavily industrialized northeastern corridor, including the cities of Paterson and Newark. Decades of heavy industry took its toll on the river, and policymakers, companies and environmental groups sparred for years about who bears responsibility for one of the most expensive clean-up efforts in the country.
One of the dozens of companies blamed for the pollution was Diamond Alkali, which produced pesticides — most notably the potent herbicide Agent Orange — at a former plant in Newark.
The pesticide facility was largely deemed responsible for elevated concentrations of the carcinogen dioxin in the lower Passaic.
Diamond Alkali merged with a Texas company to become Diamond Shamrock in the late 1960s. That company, Foreign Policy notes, was purchased by Maxus Energy Corp. in 1983.
Texas-based Occidental Chemical acquired Maxus' chemical business in 1986, but Maxus' remaining operations were acquired by YPF, Argentina's state-controlled oil company, in 1995.
Occidental last year agreed to spend $165 million to help pay for cleanup efforts in the Passaic, but the company maintained that YPF remains responsible for Maxus' legal liabilities.
The subsidiary declared bankruptcy last summer, and YPF told officials that, as a result, it would not be able to meet requests for cleanup funding.
New Jersey lawmakers, however, accused the company of arranging the bankruptcy to avoid paying, and the federal government is challenging Maxus' filing in U.S. Bankruptcy Court. If successful, the company could reportedly be on the hook for a portion of $5.5 billion in alleged damages to the environment.
YPF, analysts noted, is politically important to Macri since his government counts on oil and gas revenue to support reforms and social programs. Macri's father was a prominent developer and his relationship with President Trump dates back years.
“We’re just going to be great friends, better than ever before,” Trump told reporters during their meeting in the Oval Office.
But New Jersey officials vowed to hold both administrations accountable for YPF's portion of the cleanup, which will cost an estimated $1.4 billion.
"Unbeknownst to most Americans, YPF is trying to stick the U.S. government with its share of the cost of cleaning up one of America’s most polluted rivers while at the same time raising billions of dollars on Wall Street," New Jersey Democrats Sen. Bob Smith and Rep. Tim Eustace wrote in an op-ed last week.
