As the Olympic Games get under way in Rio de Janeiro, a wide range of industries from hospitality to manufacturing and real estate face heightened environmental exposures.
Rio de Janeiro is renowned for its natural beauty, but in the run-up to the 2016 Olympics the global focus has shifted to the environmental problems bedeviling Brazil's second-largest city. Those concerns were amplified by the usual frantic pre-Games construction rush to make sure all the transit facilities, venues and accommodations were ready on time.
More than 10,000 athletes were expected to participate in the August games, and Brazilian officials have estimated that up to a half-million additional tourists will visit during the Summer Olympics.
Garbage and raw sewage
Among the environmental issues making headlines were concerns about garbage and raw sewage in Rio's Guanabara Bay and along the iconic Copacabana beach, both venues for aquatic events. Rio de Janeiro had agreed to ambitious plans to deal with water quality and sewage as part of its bid to host the Games, but progress has lagged behind those stated goals.
While attention focuses on pollution that may affect the Olympic venues, it's not just the athletes who have to take precautions. The hospitality and real estate industries will have to deal with a wide range of environmental exposures — along with heightened scrutiny from local authorities, Olympic officials and the media. Those same risks extend to construction, manufacturing and energy companies.
Environmental goals and degulations
The International Olympic Committee has embraced environmental stewardship with a goal of making the Games a catalyst for positive change. Sustainability requirements are now part of the contracts for Olympic suppliers. Sustainable packaging, recycling and composting are integral parts of the plan to deal with the 17,000 metric tons of waste that is expected to be generated. As a symbolic step, recycled metal will be used in medals.
The Olympics, however, arrive as South America's largest and most populous country struggles with political and economic crises that have created uncertainty in all areas, including environmental laws. Generally, Brazil's regulations are broadly similar to those in the United States. National regulations focus on water, air and waste disposal, and, as in the U.S., the individual Brazilian states may impose more stringent regulations. Enforcement may vary widely, depending on the region.
During the Olympics, however, inspections are likely to be stepped up, along with enforcement in the areas around the venues and in the state of Rio de Janeiro in general. With the global spotlight on Rio, any environmental problems are likely to generate worldwide headlines.
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A worker removes trash in the sand of Botafogo beach next to the Sugar Loaf mountain and the Guanabara Bay in Rio de Janeiro, Brazil, Saturday, July 30, 2016. Just days ahead of the Olympic Games the waterways of Rio de Janeiro are as filthy as ever, contaminated with raw human sewage teeming with dangerous viruses and bacteria, according to a 16-month-long study commissioned by The Associated Press. (AP Photo/Leo Correa)
Water quality
As hundreds of thousands of people pour in to Rio, they'll arrive at a city that has been a hive of construction including new venues to house athletes at the Olympic Village and new, expanded or refurbished hotels for other visitors. Transit facilities were also built to handle the flood of visitors and transport them from beachfront areas to Olympic venues.
This burst of construction and new facilities means that water quality is likely to prove a persistent challenge during the Olympics and beyond. Those concerns may be exacerbated by storm water runoff contaminated by fertilizers and pesticides at hotel, resort and multi-unit residential properties. Runoff from construction sites or manufacturing facilities that are mixed in among residential areas may pose problems, along with septic systems used for unintended non-domestic waste.
Risks for real estate and hotels
With so much ongoing or recently completed building, environmental risks can also include construction debris or materials containing toxic or hazardous materials like asbestos and lead-based paint. Redeveloped properties may have undetected leaks from prior underground or above-ground storage tanks.
"Midnight" dumping on vacant or insecure properties is also a concern. Tenant operations such as drycleaners, auto services or warehouses can pose environmental risks to residents and neighbors.
Hotels and resorts need to be wary of contamination by legionella pneumophila — the bacteria that causes the potentially fatal Legionnaire's disease — in plumbing and water systems, as well as decorative water features such as fountains, if they are not properly chlorinated or disinfected.
A major pollution risk for hotels that may emerge once the Games have concluded is mold. Damaged or improperly sealed windows and heating and cooling equipment can lead to water intrusion that promotes mold growth. These types of construction and renovation project risks may be exacerbated by shortcuts taken in order to meet aggressive project completion deadlines. Increased humidity in unoccupied sections or floors of hotels where the ventilation and cooling systems are shut down may also lead to mold conditions.
Construction, manufacturing and energy
Key risks for the construction industry include improper disposal of regulated wastes and products, and lingering contamination from fuel or lubricant spills. Fuel spills may occur during transport or as the result of vandalism. In addition, with all the ongoing construction, Olympic visitors may have to deal with excessive dust and odors.
Local manufacturers could also draw increased scrutiny during the Games. Their exposures include corroded wastewater and storm water sewers, inadequate storm water controls in chemical storage and containment areas, and insufficient treatment of wastewater discharges. Separately, the failure to properly control emissions and odors when under the global spotlight may draw additional regulatory scrutiny to manufacturers and Brazil's energy industry.
The release of noxious fumes or hazardous vapors may be a risk for workers, residents and visitors. Improperly maintained and managed storage tanks and piping may pose a higher threat of leaks and spills for the energy industry.
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Children try to catch a crab as they play on the polluted shore of Guanabara Bay in Rio de Janeiro, Brazil, Saturday, July 30, 2016. In Rio, the main tourist gateway to the country, a centuries-long sewage problem that was part of Brazil's colonial legacy has spiked in recent decades in tandem with the rural exodus that saw the metropolitan area nearly double in size since 1970. (AP Photo/Felipe Dana)
Mitigating environmental risks
While the hospitality, real estate and other industries face a wide variety of environmental risks in Rio — along with the likelihood of heightened regulatory action and negative publicity — the exposures can be lessened with proper training, preventive maintenance and active monitoring.
Site-specific training programs can address issues such as personnel and guest protection and procedures for operating water systems that can be sources of the legionella bacteria. Specialized experts such as Certified Industrial Hygienists (CIHs) can provide on-site monitoring and testing, air quality sampling, HVAC system evaluations and advice on isolating ventilation systems during renovation or construction.
Whether it is a hotel property, apartment complex, or construction or manufacturing site, employees should actively check for problems on a regular basis to ensure that no leaks or spills or other hazardous conditions go unnoticed. Worker training can ensure that employees know what to do should a situation arise.
Dedicated pollution policies
Today, all industries face environmental risks that arise not only from spills and other incidents, but from their day-to-day operations. Because environmental exposures are typically excluded from general liability policies, businesses should consider dedicated pollution policies that can often be structured to cover an increasing range of exposures, such as mold and bacterial contamination.
For property owners, premises pollution liability policies provide environmental coverage for a particular site, or sites, and for risks arising from transportation and disposal of wastes. Contractors' pollution liability provides similar pollution coverage for construction operations at a specific project or for multiple projects.
Because of the complexities of environmental regulations and enforcement, firms may want to work with local expert consulting firms that are experienced with the laws and regulatory agencies. An insurer that understands the environmental risks and local regulations can help to provide targeted coverage for all the applicable risks, and even provide consulting services to help with risk mitigation efforts.
When the Rio Games are over, Olympic organizers hope to leave behind a lasting spirit of environmental stewardship. Companies that make a concerted effort to address their pollution exposures can help share in that legacy.
Steven Piatkowski is Senior Vice President, Environmental Risk, for Chubb. Email him at steven.piatkowski@chubb.com.
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