City of Los Angeles and Community and Environmental Groups Reach Record Settlement of Challenge to China Shipping Terminal Project at Port.

Business Editors/City Desks

LOS ANGELES--(BUSINESS WIRE)--March 5, 2003

In a groundbreaking settlement approved Wednesday by the Los Angeles City Council, environmental and community groups have agreed to resolve their two-year legal battle with the City and Port over construction of a 174-acre container complex to be operated by the China Shipping (North America) Holding Co.

Under the terms of the settlement, the Port will establish a $50 million fund to address the impacts of Port operations in the community, fully evaluate and mitigate the impacts of the proposed terminal, and commit to specific steps to address terminal pollution. The Port has agreed to use only cleaner alternative fuel yard trucks instead of diesel vehicles at the site, to enable ships to plug into electric power instead of idling their diesel engines while docked, to quickly develop and implement plans to decrease traffic in the area, and to replace the existing 16-story cranes that block community views of the harbor with shorter, lower-profile cranes.

Work was halted at the project last October as a result of a unanimous ruling by the state Court of Appeals that required the port and city to prepare a full environmental review of the pollution, traffic and other harmful impacts of the proposed terminal before resuming construction of the first wharf. The first phase of the project was 90 percent complete when work was stopped. Under the settlement today, the Port will be allowed to resume construction and begin operation of Phase 1 in exchange for these significant commitments to the community.

In a related action, the community and environmental groups have also reached a settlement with the U.S. Army Corps of Engineers (Corps) and the City of Los Angeles of their federal court lawsuit challenging issuance of a separate federal permit for construction of the first terminal wharf. Under this settlement also approved today, but contingent on approval of the state court settlement, the Corps will prepare a full environmental review of the entire project and reconsider its issuance of the permit in light of the review. The state and federal court settlements will now be submitted to the state and federal court judges, respectively, for their approval.

"These settlements approved today mark the dawning of a new era of Port and community relations," said NRDC attorney Gail Ruderman Feuer. "These settlements will start a greening of Port expansion plans that will deliver much needed funds to clean up pollution in the neighboring communities while bringing cleaner trucks and shipping operations to the Port of L.A."

According to court documents, as many as 250 of the world's largest container vessels would call at the terminal--with cargo to be moved by as many as one million trucks every year. The City has acknowledged that a single vessel can emit as much as a ton of smog-forming nitrogen oxides and almost 100 pounds of small particles or soot in a single day at berth. Under the settlements approved today, the Port will need to take steps to mitigate these impacts and protect residents of San Pedro and Wilmington from this pollution, with a particular emphasis on reducing diesel exhaust emissions.

"This settlement is evidence that the Community and Harbor Commission can have a two-way dialogue and work together in a constructive manner," said Noel Park, President, San Pedro & Peninsula Homeowners Coalition. "It also marks a turning point in Community Port relations at a time when both San Pedro and Wilmington are looking to better the quality of life and maintain a sound economic basis."

Under the state court settlement reached today, the Port will:

-- Establish a $50 million fund to mitigate the impacts of Port operations on the surrounding communities of Wilmington and San Pedro, including $10 million for incentives to clean up independently owned diesel trucks serving the port, $20 million to be spent over four years to reduce air pollution from Port operations, and $20 million to offset aesthetic impacts in both San Pedro and Wilmington, including open space and parks, landscaping and beautification and other community-based projects;

-- Prepare a full environmental review of the impacts of the China Shipping terminal and mitigate those impacts;

-- Provide electric power for ships berthed at the China Shipping terminal so they do not run their diesel engines while docked, and spend up to $5 million on the retrofit of China Shipping vessels to accommodate their use of electric power;

-- Require the use of cleaner alternative fuel heavy-duty yard trucks at the terminal;

-- Replace the four existing 16-story cranes at the terminal with "lower-profile" cranes to reduce the visual impact, and require all new cranes to be lower-profile if available at a cost of no more than $8 million each;

-- Develop and implement a traffic plan for the terminal and other Port operations that must begin implementation this year; and

-- Assure the continuation of the Port Community Advisory Committee that provides community input to the Board of Harbor Commissioners.

Additionally, the Port last month adopted resolutions that will require cleaner alternative fuel yard tractors in all future leases and significant renegotiations of existing leases for terminals throughout the Port, require that future cranes be lower profile, and create a new full-time post of "Environmental Mitigation Coordinator" to assist mitigation efforts and serve as a liaison with the community.

"This settlement marks a significant step toward establishing an environmentally sustainable port. As the port implements this settlement, air pollution will be reduced as will the health impacts on the surrounding communities," noted Todd Campbell, Policy Director of the Coalition for Clean Air.

The San Pedro-Wilmington district already has the highest concentration of diesel truck pollution in the Los Angeles basin. Moreover, according to a recent study by the South Coast Air Quality Management District, residents there suffer from some of the highest cancer risks in the South Coast from breathing toxic pollution in the air. The study estimates that over 70% of this cancer risk comes directly from diesel exhaust.

"We look forward to seeing the Port become a good neighbor, and believe that this agreement is a huge step in that direction," said Agustin Eichwald, Wilmington Organizer for Communities for a Better Environment.

The environmental groups and local residents filed the lawsuit in June 2001 claiming that the port and city's approval of the terminal--without considering its harm to neighboring communities, or taking steps to lessen that harm--violated the California Environmental Quality Act.

NRDC is a national, non-profit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 550,000 members nationwide, served from offices in New York, Washington, Los Angeles and San Francisco. More information is available through NRDC's web site at www.nrdc.org.

San Pedro and Peninsula Homeowners Coalition and San Pedro Peninsula Homeowners United are associations of homeowners and renters who live in San Pedro adjacent to the Port of Los Angeles. The associations were formed to protect the interests of these local residents.

The Coalition for Clean Air is a non-profit environmental organization dedicated to restoring clean healthful air to California by advocating responsible public health policy; providing technical and educational expertise; and promoting broad-based community involvement. More information is available through the Coalition's website at www.coalitionforcleanair.org.

Communities for a Better Environment is a 24-year-old nonprofit environmental organization working with communities for environmental justice. Visit www.cbecal.org for more information.