Norwegian resources giant Norsk Hydro is planning to invest US$64.5 Million in the water treatment system at Alunorte alumina refinery in Barcarena, Brazil, after admitting it is responsible for a series of leaks that have fouled the water supply for people living nearby.

"We have discharged untreated rain and surface water into the Para River," said Hydro president and CEO Svein Richard Brandtzaeg said.  "This is completely unacceptable and in breach with what Hydro stands for.  On behalf of the company, I personally apologize to the communities, authorities and the society."

Residents in the city in Brazil's north complained to environmental authorities about a reddish hue in puddles and in flooded areas near the river after some heavy rains.  "It started to inundate the homes of people near the basin - the streams started to receive this red mud, the color of the streams started to change, dead fish started appearing," said Nilson Cardoso, president of a commercial association in nearby Beja. 

At first the company had initially denied it was responsible, saying there was no proof of leakage from its bauxite residue deposits.  But last week, its said that internal investigations found problems in the water treatment system, including cracks in a pipeline and that caustic soda had mixed with rainwater and flowed into the canal after a power failure at the plant.

Residents had been complaining for some time about pollution from the plant, which Norsk Hydro calls the world's biggest, and other factories.  They say the discharges contaminated their water, causing diarrhea and vomiting and poisoning fish and local produce.  "The number of fish has reduced, the fruit are not the same as they were before," he said.  "Local people have suffered health problems including diarrhea, vomiting, hair loss and itching," said Mr. Cardoso.

In November, the residents launched a US$154 Million legal claim for environmental and moral damages against the Para state government, the Hydro Alunorte alumina refinery and the Albras aluminium factory.  And then the threats started, as has happened several times to environmental campaigners in Latin America in recent years. 

Last week, gunmen cut down a leading community organizer named Paulo Nascimento.  Some of his fellow campaigners believe the killing is linked to the community's lawsuit, but Norsk Hydro denies any link to the crime:  "Hydro strongly disapproves any action of this nature and repudiates any type of association between its activities and actions against residents and communities of Barcarena," said Halvor Molland, Norsk Hydro's senior vice-president of media relations.