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Housekeeping is cheap

Jim frequently encourages good housekeeping in his “Nip Impressions.”  He cites many reasons beyond the obvious ones of improved appearance of the mill to employees and visitors, but has not attempted to put a monetary value on housekeeping.  I fully agree with his philosophy, but cannot support it on the kind of accounting basis that is desired by all too many managers, particularly those at the corporate level seeking to reduce manpower in mills.

Recent news has provided one benchmark on the value of good housekeeping which shows that housekeeping is cheap relative to the alternative.  It was recently announced that International Paper has paid $3.3 million in criminal fines and penalties for a spill of black liquor from the evaporators in their Bogalusa mill into the Pearl River in Louisiana.  The mill was owned by Temple-Inland at the time of the incident in August 2011.

I thought that this was quite a lot, but further browsing of the web showed that they had also settled civil actions by local residents for $13.5 million.

The mill was shut down for several days by the incident.  Review of a plan to restart the mill that was published on the State regulator’s site suggests that the company spent something in the order of $10 million in upgrades to reduce risk of another such incident.

I have not seen any analysis of the total cost of the incident to the company, but when production losses are included, we have to think of several tens of millions of dollars.  All because of a black liquor leak that went undetected for a few days.

Black liquor leaks in mills are, of course, all too common.  However, where spill detection systems are well maintained, and housekeeping practices are good, they are normally detected and rectified within minutes, or, at worst, hours, so they have no significant impact on the public or the receiving water.   Reading the comments by the mill’s opponents in the media, and by regulators, it seems that much, if not most, of their ire and legal success was due to the fact that it took several days for the company to detect the leak.

The publicly available mill start-up plan suggests that there was lots of room for improvement in housekeeping.  It appears that when IP took over the mill, there was a major shakeup, so I suspect that housekeeping will be up to, or approaching, Jim’s standards by now.  If only Temple-Inland had listened to Jim in the past, they could have saved a lot of money, and avoided a lot of heartburn in many staff.

I have not been involved in the Bogalusa Incident (as the debacle is referred to by IP) at all, and have never visited the mill, so of course the foregoing comments are based on public information.  I have presented it as a concrete example of what I have seen in several mills with poor housekeeping. 

I have inspected or worked on about 40 black liquor spill control systems around the world, and have seen all too many inoperable, or sub-optimal, systems and practices.  Most of the defective systems were quite well designed and built, but suffered from neglect (= poor housekeeping) or lack of operator knowledge.  None of those I have visited have experienced the costs of the Bogalusa mill issue, although some have incurred fines and had to make damage payments.

On the other hand, three of the best four systems I have seen were in mills built before the turn of the last century.  In all four of these mills, housekeeping was impeccable.  None had incurred capital costs anywhere near the level implied by the capital program Temple-Inland undertook to mollify the aggrieved parties on the Pearl River. 

I tried to count the number of lawyers involved in the Bogolusa incident, but gave up when I reached about 50 for the defense and nearly as many representing the plaintiffs.  Many of the defending lawyers represented the company’s insurers.  However it is counted, it is clear that there were more lawyers involved than operators and clean-up men in the mill’s evaporator department. 

There are two costs that are rarely mentioned in publications on instances when mills get into serious disputes with environmental regulators and the local residents.

The first is the grief, frustration and career damage that was experienced by many of the staff involved.

The second cost, which I have never seen analysed by accountants, is the massive amount of time spent by middle management and technical staff on litigation-related issues, that detracts from running the mill well.

The bottom line is that most mills today have already invested in physically adequate systems for control of spills of black liquor, but those that follow Jim’s gospel on housekeeping run much less risk of being hit with issues like the Bogalusa Incident than those who do not follow Jim.

When thinking of possible environmentally damaging materials, few mills carry a sufficient inventory of such substances (other than black liquor).  Fuel oil is an exception, but the systems are simpler and the industry’s track record in avoiding serious oil spills is very good. That said, good operating practices are just as necessary with oil as with black liquor.


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