Hundreds of people near the Kenyan port of Mombasa say they have become ill after a consignment of leaking chemical containers was dumped nearby.
Two clearing and forwarding agents have been arrested and face charges.
Witnesses told the BBC the containers were abandoned at Kipevu near the port about a month ago by a truck driver who had noticed liquid seeping out.
A BBC reporter in Mombasa says two women living in a Kipevu slum have complained of having miscarriages.
Other slum residents have complained of breathing difficulties, stomach upsets and chest pains.
The containers have traces of nitric acid, an environmental official says.
The BBC's Odhiambo Joseph says he also experienced breathing difficulties and a stomach upset after visiting the area.
He says a yellow liquid and noxious fumes have been escaping from the two 20-foot containers.
The National Environmental Management Authority (Nema) says it has brought in tonnes of sand and other agents to try to neutralise the spill.
Mombasa's Deputy Mayor John Mcharo said the two agents are being questioned whilst the council is waiting to receive a report by Nema.
"I cannot name the people now but we expect a report on the effects of the waste later today and we shall proceed and charge them in court," Mr Mcharo told BBC News.
He said initial investigations confirm that the clearing agents handled the container with the toxic chemicals from the port of Mombasa before it was dumped a month ago.
Nassir Rashid, the director of environment at the Mombasa Municipal Council (MMC), says samples of the chemicals have been sent to the government chemist for identification.
The containers were dumped by a residential area
But he says the chemicals are extremely toxic and more than 1,500 villagers have been treated for various illnesses caused by the chemicals.
Morris Otieno from Nema said an operation to neutralise the chemicals has been successful, but our reporter says the effects are still being felt and one container is still leaking.
The chemical cargo was on its way from Mombasa port to a mining company in western Uganda when it was dumped.
The MMC has ordered the company to appear in court to answer charges of environmental pollution, our correspondent says.
The company says an agent in Mombasa is dealing with the case.
The chemicals are also said to be destroying property, corroding the metal sheets used to build houses and melting anything made of plastic.
According to residents in the slum - known as Kalahari Village - the acid seems to have entered the latrine systems.
Kibibi, whose house was near the chemical spill, alleges she miscarried as a result.
"It was a three-month-old pregnancy. I had gone to relieve myself in the toilet, while there but was hit by a strong fume," she told the BBC's Network Africa programme.
"I quickly gathered myself up and ran back towards my room but I could not manage - I fell down and I started bleeding immediately."
Residents say their livestock has also been affected and some of the animals have died.