The Asarco Bankruptcy
Faced with staggering environmental liabilities from a 110-year operating history, in 2005 the American Smelting and Refining Company (Asarco) filed for protection under chapter 11 of the bankruptcy code. In 2009, Asarco emerged from bankruptcy under a court-approved reorganization plan that provided a host of federal and state agencies with the benefit of $1.79 billion to cleanup numerous contaminated Asarco sites throughout the country. Under the approved plan of reorganization, the largest environmental settlement in bankruptcy history, three environmental custodial trusts were created and received a total of $261 million to address Asarco’s cleanup responsibilities at twenty four sites located in thirteen states. One of the three trusts, the Montana Environmental Custodial Trust took title to the four Montana sites, comprised of approximately 4,000 acres of land, and received funds totaling almost $138 million to pay for their cleanup and restoration.
The Beneficiaries of the Montana Environmental Custodial Trust
The Custodial Trust is accountable, with direct fiduciary obligations, to the United States and the State of Montana. The United States beneficiaries of the Custodial Trust are the United States Department of Justice (USDOJ), the United States Environmental Protection Agency (USEPA), the United States Department of the Interior (USDOI), the United States Fish & Wildlife Service (USFWS), the United States Department of Agriculture (USDA) and the United States Forest Service (USFS). The State beneficiaries include the Montana Department of Environmental Quality (MDEQ) and the Montana Department of Justice (MDOJ).
Lead Agencies of the Montana Environmental Custodial Trust
The Montana Settlement Agreement designates a “Lead Agency” to oversee Custodial Trust’s cleanup activities for each of the Montana Sites. In consultation with the non-Lead Agencies, each Lead Agency has final approval authority over cleanup activities, funding, expenditures and the contractors, consultants and other professionals retained by the Montana Custodial Trust to work at the Montana Sites. The Lead Agency can either oversee the Custodial Trust’s cleanup or can itself perform the cleanup using trust funds.
The designated Lead Agencies for the four Montana Sites are:
USEPA for East Helena site cleanup;
USDOI for East Helena site natural resource restoration;
MDEQ for the UBMC/Mike Horse site cleanup;
MDEQ for Black Pine mine cleanup;
USDOI for Black Pine mine natural resource restoration;
MDEQ for the Iron Mountain site cleanup; and
USDOI for Iron Mountain site natural resource restoration.
USEPA is overseeing the Montana Custodial Trust’s cleanup of the East Helena Site under federal hazardous waste laws, including the Resource Conservation & Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA or superfund). USEPA consults with the USDOJ, USFWS, MDEQ and MDOJ on Montana Custodial Trust environmental actions, which are focused on soil and groundwater contamination caused by more than a century of smelting lead, zinc and other ores at the East Helena facility. USDOI and the USFWS will undertake natural resource restoration to be paid from funds held in trust for USDOI by the Montana Custodial Trust. The State also plans significant restoration activities at the East Helena Site utilizing funds paid directly to MDOJ as part of the Asarco bankruptcy settlement. Under superfund, USEPA is completing the cleanup of lead-contaminated soils in private residential yards and other private properties in East Helena not owned by the Custodial Trust. USEPA’s residential cleanup activities are funded by a separate trust established prior to the Asarco bankruptcy settlement.
Upper Blackfoot Mining Complex (UBMC)/Mike Horse
Under the direction of MDEQ, the Custodial Trust is operating the UBMC/Mike Horse water treatment plant, designed and built by Asarco to treat water contaminating the Blackfoot River because of historic mining activities at the UBMC. MDEQ consults with the USFS and MDOJ on the Custodial Trust’s activities. Separately, in collaboration with the USFS and MDOJ, MDEQ is carrying out remediation and restoration of the UBMC, including the Mike Horse Dam, on property largely owned by the USFS, which is situated at the headwaters of the Blackfoot River. Cleanup and restoration are paid out of funds received directly by the State as part of the Asarco bankruptcy settlement and other sources.
Black Pine Mine Complex
In consultation with the USFS, the Hard Rock Division of MDEQ is remediating contamination from silver and lead mining at the Black Pine Mine site. USDOI will address the natural resource damages with trust funds. The Custodial Trust’s role at Black Pine is limited to managing the Black Pine cleanup and natural resource damage funds and providing contract and administrative support to MDEQ.
The Iron Mountain Site is part of the larger Flat Creek/Iron Mountain & Mill (IMM) federal superfund site that was added to USEPA’s national priorities list in 2009. Under the Montana Settlement Agreement, in consultation with the USFS, MDEQ is the Lead Agency for the Iron Mountain Site. Cleanup of the property owned by the Custodial Trust will be coordinated with the EPA-led superfund cleanup process at the Flat Creek/IMM NPL site. USDOI will address natural resource damages utilizing trust funds.
Land Development and Sale
Under the Montana Settlement Agreement, the Custodial Trust must secure the prior approval of the Lead and non-Lead Agencies who are beneficiaries of the Custodial Trust before it can lease, sell or transfer land that is part of a Montana Site.
East Helena Redevelopment
At East Helena, USEPA and the State of Montana must approve any sale, lease or conveyance of any real property interest in the East Helena site to a public or private third party. The Custodial Trust must also secure approval of the USDOI for properties in East Helena where it has performed natural resource restoration. Sale proceeds are used to fund further cleanup activities at East Helena.
Montana Mining Sites Redevelopment
Sale or lease of any Custodial Trust property at the UBMC/Mike Horse, Black Pine and Iron Mountain sites must be approved by the State of Montana and the USFS. Proceeds from any lease or sale are deposited in the cleanup accounts for each of the three mining sites and will be used to pay for further cleanup of the sites.
A Unique Public-Private Environmental Trust
The Montana Environmental Custodial Trust is an independent, non-profit entity created to cleanup, restore and revitalize the hazardous waste sites once owned by Asarco in the state of Montana. As a private landowner, it is responsible for the management and stewardship of the Montana sites. As a fiduciary, whose sole beneficiaries are governmental entities, its purposes are aligned with the environmental missions and economic goals of the United States and the State of Montana. The Montana Environmental Custodial Trust is thus a unique private trust with a public purpose.
In fulfilling its responsibilities, the Custodial Trust recognizes and values the critical role of other stakeholders—communities, local governments, business interests and non-governmental organizations—who are often most impacted by the cleanup and revitalization of these sites. The Custodial Trust and its beneficiaries are committed to an enduring partnership with such stakeholders through honest, open dialogue and collaboration.
The Greenfield Environmental Trust Group, Inc. (GETG)
The Montana Environmental Trust Group, LLC is a wholly owned subsidiary of the Greenfield Environmental Trust Group, Inc. (GETG). GETG is a nationally recognized leader and one of our country’s earliest pioneers in the remediation, redevelopment and long-term stewardship of complex hazardous waste sites. GETG was awarded two National Phoenix Awards for successful redevelopment of the two federal hazardous waste sites. The company’s track record of success spans almost twenty-five years as a third-party trustee, project champion and strategic advisor to governments, industry and communities on the responsible, sustainable cleanup, reuse and stewardship of hazardous waste sites nationwide. Through it’s subsidiaries, GETG serves as the federal district court-approved Trustee in four separate trust appointments with the United States, twenty-four State governments and two Fortune 100 companies as its beneficiaries, including the Industri-plex Superfund Site Custodial Trust, the Montana Environmental Custodial Trust, the Multistate Environmental Response Trust and the Savannah Environmental Response Trust. GETG also served as the court-appointed Third-Party Trustee for the Production Plated Plastics RCRA Facility. As a trusted fiduciary, GETG currently manages, oversees and implements cleanup and disposition of more than 500 sites across the country. GETG was selected by the United States and the State of Montana to serve as Trustee for Montana Environmental Custodial Trust.