Battery recycling in Mexico | A Caisse company that pollutes too much?

Two Mexican factories of the Clarios company, in which the Caisse de depot et placement du Québec holds 30% of the shares, are singled out in a new report. Two non-governmental organizations claim that the vicinity of these car battery recycling plants receives lead concentrations that exceed Mexican standards by several times.

According to the report published Monday by the organization Occupational Knowledge International, the lead concentration reached 8502 parts per million (ppm) of soil on average, or 10 times more than the standards of the country, in the vicinity of one of the two factories. recycling from Clarios, the largest US exporter of batteries to Mexico^⁠1.

It should be noted that other factories carrying out the same activities in the same sector also exceed the standards related to lead.

“We are aware of the allegations. Since these are important questions, conversations are underway with the company to verify what is going on, “said the Caisse de depot in writing at the end of the day on Thursday.

Lead is a metal that has long-term adverse health effects. Prolonged exposure can lead to high blood pressure and kidney problems in adults. Children and pregnant women are even more vulnerable to its toxic effects.

“It is imperative that Mexico take immediate action to update the ambient air standard for lead,” the NGOs recommend in their report. There is also a need to invest in stronger enforcement measures. In addition, Mexico must adopt comprehensive occupational health and safety standards to protect workers. They demand that medical protection be offered to workers overexposed to lead.

An article from New York Times released last Monday echoes the NGO report. The text reports the testimony of a nurse who worked for a Mexican battery recycling plant not belonging to Clarios. Up to a third of blood tests taken from 300 workers revealed lead levels deemed unsafe in the United States^⁠2.

“At Clarios, strict safety protocols are in place and we provide our employees with state-of-the-art protective equipment,” company spokeswoman Ana Margarita Garza-Villarreal said in an email. We regularly measure the working environment and employee exposure to ensure the effectiveness of health measures. We take the issues raised seriously, she continues, and are currently closely reviewing the claims and statements made therein. »

The Fund since 2019

Since 2019, the Caisse de dépôt is co-owner of Clarios. Its stake was valued at more than 1.5 billion as of December 31, 2021. The Caisse and its partner Brookfield Business Partners bought what was called Johnson Controls Power Solutions for the sum of 13.2 billion US, including debt.

Clarios is one of the world leaders in automotive batteries. It sells 140 million a year all over the world. It owns 15 factories in 7 countries. Its annual sales amount to US$9.26 billion for the 12-month period ending September 30, 2022.

Heavily indebted (more than 10 billion US in debt), the manufacturer has lost 450 million US since the 1^er October 2019. Two directors of the Caisse de dépôt, Justin Shaw and Bertrand Villon, sit on the Clarios board of directors.

“It’s up to the Caisse’s two administrators to ask questions internally. Certainly, when the Caisse invested in Clarios, it had green ambitions, so there are certainly questions that will arise”, says François Dauphin, CEO of the Institute for the governance of private and public organizations, to whom The Press asked to comment on the situation.

The report prepared by an American organization and a Mexican partner collected 28 soil samples around 7 lead-acid battery recycling plants in Mexico. Samples were collected up to 385 meters away from the plant boundary. The results were analyzed by an independent laboratory.

Export hazardous waste to save

“We have had issues with Clarios for a long time, but the disagreements have become more serious with the new owners,” said Perry Gottesfeld, founder of the NGO Occupational Knowledge International, in a telephone interview.

He laments that Clarios decided to close its only lead-acid battery recycling plant in the United States at the beginning of 2019 and then transfer its recycling activities to Mexico, where lead exposure standards are less stringent.

Big Savings

As early as 2013, the Commission for Environmental Cooperation, headquartered in Montreal, highlighted the gap between North American countries with respect to lead emission standards in a report on the trade in motor vehicle batteries.^⁠3.

The relocation of Clarios’ recycling activities to Mexico has saved US 30 million per year, or about 25% of the costs associated with battery recycling, the company maintains in documents filed with the American stock market watchdog. It plans to make a public offering when conditions permit.

Mexico is the destination for at least 75% of old batteries leaving the United States. The volume of exports of this product to Mexico [515 000 tonnes en 2021] has grown by an average of 18% per year for 10 years, according to the report of the two NGOs.

“There is an immoral side to exporting your pollution problems to poor countries,” says Professor Luc Bernier, of the Graduate School of Public and International Affairs at the University of Ottawa. The Caisse should be able to tell Clarios to improve its environmental record and to install itself properly so that workers are not at risk. Lead exposure kills people in the long run. »

For his part, François Meloche, director of shareholder engagement at Æquo, notes that the ESG report of Clarios [portant sur les enjeux environnementaux, sociaux et de gouvernance] Yes, it mentions worker protection, but is silent on surrounding communities and pollution issues.