It was, literally, a whale of a controversy, one that raged on for half a decade. And now it's apparently over: Exportadora de Sal, SA de CV (ESSA at www.bajasalt.com) has halted plans for a US$150 million expansion of a massive salt plant in a southern Baja California lagoon that serves as a breeding ground for gray whales.

President Ernesto Zedillo (www.presidencia.gob.mx) announced that the plans had been cancelled. ESSA officials said the company would not challenge the president's order. ESSA is a joint venture formed in 1976 between the Mexican government, which holds 51 percent ownership, and Mitsubishi Corp. (www.mitsubishi.co.jp), which holds 49 percent ownership.

The plan has been under heavy fire from environmental groups since it first surfaced in 1995.

In his order halting the ESSA plan, Zedillo pointed to environmental studies that showed that the plant would pose no threat to the gray whales and chastised project opponents for focusing on that issue. (Other reports, however, have countered that finding.)

Mitsubishi officials sounded a little more conciliatory at a news conference held after Zedillo's order.

"Both of us shared the vision that we should not go ahead with the project,'' said Mitsubishi Director James E. Brumm. "We considered a number of arguments from different people, but the one we decided on was that the site should be preserved for ecotourism."

Location Was on UN-Designated
World Heritage Site

ESSA has almost outgrown its current plant in the area, which is sited in the Ojo de Liebre lagoon just south of the city of Guerrero Negro in southern Baja. The existing plant ranks as the world's largest salt evaporation facility.

ESSA planned to build another $150 million operation located near the San Ignacio lagoon on an undeveloped site. That site is part of the Vizcaino Biosphere Reserve, which UNESCO declared a World Heritage Site in 1993.

ESSA's plan involved building a 116-sq.-mile (300-sq.-km.) system of dikes and ponds in which seawater would've been evaporated. The plan also included constructing a dock, which would have been one mile (1.7 km.) long and used in loading cargo ships.

Environmentalists Hail Decision

Environmental organizations praised the move to halt the new plan.

"For five years, it's been a very tough fight with one of the world's richest companies and the Mexican government," said Homero Aridjis, a poet and novelist who is president of the environmental Group of 100, the first activist organization to oppose the ESSA plan.

"This is one of the most important environmental decisions in our generation, not only for Mexico but for the entire world as well," said Joel Reynolds of the New York-based Natural Resources Defense Council.

Many groups have weighed in on the ESSA plan, some taking diametrically opposed views. Last July, for example, 34 highly regarded scientists signed a letter protesting the ESSA expansion. The letter appeared in newspapers across the world. The Natural Resources Defense Council also spearheaded a letter-writing campaign.

In October, though, a UN-sponsored fact-finding mission visited the area and said the ESSA project posed no threat to the UN-declared World Heritage Site.

"The mission team does not consider the World Heritage Site under present circumstances to be in danger, and scientific data show that the whale population is not endangered and continues to increase," the UN report concluded.

The UN report also praised ESSA's work in protecting the region's environment.

Mexico's Environmental Secretary
Question's ESSA's Record

However, a 1998 audit of ESSA by Mexico's secretary of the environment found 290 separate environmental violations, including dumping batteries into the lagoon. (ESSA officials claimed that the batteries were utilized to weigh down channel markers, and the practice has since been stopped.)

Mexico's secretary of the environment also rejected ESSA's first environmental-impact study for the Laguna San Ignacio, saying it didn't provide sufficient environmental guarantees. Apparently, this ends the dueling reports.

Zedillo has already said that the Mexican government will create special projects and provide compensation for the communities that would have felt the most significant economic impact from the ESSA project.

But the $150 million expansion would've been far more intensive in capital than labor. The new plant would've created between 200 and 250 jobs, ESSA officials said.