The world's largest refinery of zinc and lead, located in Canada 10 miles north of the U.S. border, has turned Washington state's beaches black and polluted the water.

The company, Teck Cominco, has discharged 1,000 tons of the black smelting byproduct called slag for almost 100 years, according to the Environmental Protection Agency (search). The EPA is now trying to force Teck Cominco — under U.S. Superfund (search) law — to pay for a comprehensive study, and then clean it up.

But Teck Cominco doesn't accept this.

"We were a facility in Canada, permitted to do what we were doing, discharging, we believed, a material that was inert, and now ends up in the United States. And the U.S. is trying to step across the border and enforce its regulations on a facility that exists outside the country," said Dave Godlewski of Teck Cominco (search).

Nobody's disputing that this area is polluted with arsenic, copper, lead and zinc, and that the continued presence in the water and sand most likely pose serious ongoing health risks. There's even consensus on the principle that the polluter pays for the cleanup. Yet, Teck Cominco won't budge on which country's laws control the process.

Under Canadian law, Teck Cominco would have full control of the environmental study, and would only have to clean up the pollution it found to be hazardous. The EPA and the people who live near the lake say that's unacceptable.

Click here for a complete report by Fox News' Dan Springer.